MONEY AND WORK

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January 11, 2009

CRASH TALK

Wall Street Journal - The U.S. Treasury has failed to reveal its strategy for stabilizing the financial system, not answered questions asked by a government watchdog, and has done nothing to help struggling homeowners, a report charges. In the most scathing criticism yet of Treasury's implementation of the $700 billion financial-rescue package, a draft report being issued by the five-member congressional oversight panel said there appear to be "significant gaps" in Treasury's ability to track hundreds of billions of dollars of taxpayer money. . .

The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government; having no standards for measuring the success of the program; and for ignoring or offering incomplete answers to panel questions.

The bipartisan panel, headed by Harvard Law School professor Elizabeth Warren, reserved its most strident criticism for Treasury's approach to dealing with the foreclosure crisis at the root of the economic turmoil. The draft report noted that Treasury hasn't used any of TARP's $700 billion to help borrowers refinance or deal with mortgages that are worth more than the market value of the homes they are tied to.

David Sirota, Open Left - Here's the Washington Post's E.J. Dionne on Obama's tax cut proposals: "About $100 billion of the package is expected to go to a variety of business tax cuts, some likely to be at best marginally stimulative. Why is Obama doing this? One Capitol Hill Democrat familiar with the president-elect's recent meeting with congressional leaders said that Obama told Republicans that while he could probably get his program through with mostly Democratic votes, he preferred to win GOP support so that his program could pass quickly and be sustainable over time."

So, according to Dionne, Obama is pretty openly sacrificing part of "his program" (which we can assume is his progressive spending promises) not so that he has enough votes to pass it - Obama says he "could probably" get that through as is thanks to big Democratic majorities. No, he's sacrificing "his program" so that he gets lots of extra Republican votes - most of which he doesn't mathematically need but which he wants.

Why does he want this? Dionne says "so that his program could pass quickly and be sustainable over time." That's a silly platitude - last I checked "bipartisanship" has nothing to do with speed or "sustainability over time." Last I checked, FDR passed the New Deal very quickly over Republican objections, and it's tenets lasted for almost three-quarters of a century. Last I checked, George W. Bush passed his tax cuts very quickly over Democratic objections, and those tax cuts continue to confine American politics to this day.

No, what this is about is Obama wanting to create a "bipartisan" image for himself. And that raises an important question: At a time when Obama is sounding the alarm about deficits, how much should taxpayers have to pay for political aesthetics? Put another way, how much should we have to pony up in order to help Obama make David Broder happy?

Reuters - Swiss wealth manager UBS is closing all the offshore accounts of its U.S. clients, the bank said, as it comes under pressure from U.S. tax authorities. The Swiss bank decided in July last year to stop offering offshore accounts to U.S. citizens after it was targeted by a U.S. tax investigation which challenges Switzerland's famous banking secrecy laws.

U.S. prosecutors have alleged UBS helped clients hide $18 billion of untaxed American money in undeclared accounts. This amounts to around $300 million of annual unpaid taxes, the newspaper said.

Times UK - The number of people searching for flights in the week after Christmas fell 42 per cent this year compared to the same period last year, as consumers rein in their spending as a result of the slowdown. January and the period immediately after Christmas are usually a busy time for the industry as people start booking their Easter and summer breaks. However internet searches for flights were down over 40 per cent in the week after Christmas according to Hitwise, a division of Experian.

Mother Jones - It turns out that the application for TARP funds is surprisingly simple. . . The application is just two pages long. As a test, we decided to fill it out. Including the time it took us to explain this project to our chief financial officer, the TARP application took a mere 27 minutes to complete.

To put it in perspective, here are five things that take longer than filling out the TARP application.

1. Applying for Temporary Assistance for Needy Families: 4 hours.

2. Watching Wall Street: 2 hours, 5 minutes.

3. Making a tuna noodle casserole: 1 hour, 20 minutes.

4. Applying for New York State unemployment insurance benefits: 30 minutes.

5. Applying for food stamps in New Jersey: 30 minutes.

One of the only things that takes less time is filling out a credit card application: 2 minutes.

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