Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

February 3, 2009


Although no Republicans voted for the House bailout package, GOP governors are on the case, trying to make sure they get monies aimed to their states to help with matters like Medicaid shortfalls. The National Governors Association backs the plan saying that governors "support several key elements of the bill critical to states-increased federal support for Medicaid and K-12 and higher education; investment in the nation's infrastructure; and tax provisions to spur investment."

One critical question, will the governors just use most of the money to fix current deficits - which will have less impact on the economy - or will they, as Pennsylvania's Ed Rendell says he will, push spending that fits the purpose of the measure.

Press Connects New York's Charles Rangel and five other Democratic members of the House enjoyed a trip to the Caribbean sponsored in part by Citigroup in November - after Congress had approved the $700 bailout for financial firms (including Citigroup). . . The National Legal and Policy Center, a watchdog group, has asked Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (to investigate the Nov. 6-9 excursion to the island of St. Maarten. "Corporate sponsorship of such an event was banned by House rules adopted on March 1, 2007, in response to the (lobbyist Jack) Abramoff scandal," the group pointed out.

Stuart Grudgings, Reuters - The world's biggest gathering of leftist activists ended on Sunday, after six days of discussions and protests that participants said showed there was an alternative to a crumbling global capitalist system. Timed to coincide with the Davos meeting of business leaders in Switzerland, this year's Forum attracted a record number of government leaders keen to burnish their leftist credentials in the wake of the global financial crisis. . . Brazilian President Luiz Inacio Lula da Silva's government spent about $50 million on the Forum and brought a dozen cabinet ministers. Four other leftist Latin American presidents also visited and received a heroes' welcome. Rather than making binding decisions, the Forum's main role is as a huge networking and discussion opportunity for activists. The global crisis was a common theme, with many saying it showed that free-market capitalism was on its last legs.

Dirt Diggers Digest - Rather than wasting vast additional sums in a bad-bank bailout, why doesn't the federal government direct its resources toward the creation of a "good" bank? The Federal Reserve is already acting not just as the lender of last resort to banks but has also provided loans to non-financial corporations by purchasing their commercial paper. Why stop there? If the for-profit banking system really is dysfunctional, then the solution may be to have the federal government step in to replace or supplement it in a major way. That's the kind of intervention that may actually do us some good.

Think Progress
- Appearing on CNN, former New York mayor Rudy Giuliani stridently defended the practice of enormous bonuses untethered to actual performance, warning that ending the tradition "really will create unemployment": "I remember when I was mayor, one of the ways in which you determined New York City's budget, tax revenues, was Wall Street bonuses. Wall Street had a billion, two billion in bonuses, city had a deficit. Wall Street had 15 to 20 billion, New York City had a 2, 3 billion surplus. And it's because that money gets spent. … It does have a reverse effect on the economy, if you somehow take that bonus out of the economy. It really will create unemployment. It means less spending in restaurants, less spending in department stores."

The Girl Scouts of the USA confirmed that it has reduced the number of cookies per box to save money because of rising transportation and baking costs. People buying Girl Scout cookies like these on their Web site this year can expect fewer cookies in the packages. Michelle Tompkins, a national Girl Scout spokeswoman, said that "the cost of baking a cookie today is significantly higher than it was even a year ago, and our bakers cannot continue to absorb these rising costs." She also said transportation costs have increased 30 to 40 percent from a year ago. The combined cost increase prompted the organization to "lower the net weight of our cookie boxes slightly rather than ask our customers to pay a higher per-package price during these difficult times," Tompkins said in a written statement. There will be two to four fewer cookies in boxes of Thin Mints, Peanut Butter Sandwiches, Shortbread Cookies, DoSiDos and Trefoils, she said.

Beth Healey, Boston Globe
- Banks and other lenders nationwide, seeking to reduce their debt exposure, are shutting off and limiting consumer credit card lines, even for many customers who carry low balances and pay on time. As much as $2 trillion in consumer credit - nearly half of what is available - could be rescinded, according to an estimate by a prominent banking analyst. Just two years ago, institutions were handing out liberal borrowing lines to almost anyone. But now, drowning in debt and soured investments, lenders are seeking to stop consumers from running up big balances in hard times, bills they might not be able to pay. The credit squeeze doesn't just limit spending potential; it can also damage cardholders' credit ratings by making them appear to be riskier borrowers. And in many cases, the institutions pulling back on credit took government bailout funds that were supposed to encourage them to lend more freely.


Anonymous Anonymous said...

Re: "you somehow take that bonus out of the economy. It really will create unemployment. It means less spending in restaurants, less spending in department stores."
So Rudy thinks his luxuries are necessary to our making a living? Imagine there was an alternate economical model wherein people provided each other with necessary services and goods at an honest price including human cost and ecological cost?

February 3, 2009 5:13 PM  

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