Bush Stimulus Package

July 23, 2009

By Padmini Arhant

Presentation of Bush Stimulus Package details

From: Stimuls Package details – Thanks

Source: http://www.stimuluspackagedetails.com/bush.html

Bush Stimulus Packages

In 2008, the Bush Administration handed out a slew of economic stimulus packages.

Under President George Bush’s administration, the Federal government gave

$29 billion to bail out Bear Stearns,

$178 billion to American taxpayers in the form of economic stimulus checks,

$300 billion to bail out American homeowners,

$200 billion to bail out Fannie Mae and Freddie Mac,

$150 billion to bailout AIG, and

$700 billion to bail out banks (TARP).

Total Bush Administration Bailout – $1.557 trillion dollars i.e. $1 trillion and $557 billion dollars.

Timelines Of The Bush Economic Stimulus Packages

Following is a timeline of the economic stimulus packages, in chronological order.

March 2008 – $29 Billion Stimulus Package – Wall Street Bailout

The Federal Reserve stepped in to prevent the collapse of Bear Stearns (one of the world’s largest investment banks and brokerage firms) by guaranteeing $29 billion worth of potential losses in its battered portfolio. This provided enough economic stimulus for JP Morgan Chase to take over the beleaguered firm.

May 2008 – $178 Billion Stimulus Package – Average American Bailout

The U.S. Treasury provided an economic stimulus package to American taxpayers in the form of $600 economic stimulus checks for individuals and $1,200 economic stimulus payments for couples.

That cost the government $100 billion, and they threw in another $68 billion in tax breaks for businesses, $8 billion to increase unemployment benefits from 26 weeks to 39 weeks, and a $4 billion economic stimulus package to be doled out to states and local municipalities to buy and rehab foreclosed properties.

July 2008 – $300 Billion Stimulus Package – Homeowners Bailout

The Bush Administration committed $300 billion for 30-year fixed rate mortgages for at-risk borrowers, as well as tax credits for first-time homebuyers, who could be eligible to receive up to a $7,500 tax credit.

September 2008 – $200 Billion Stimulus Package – Fannie Mae and Freddie Mac Bailout

Fannie Mae and Freddie Mac (privately owned mortgage companies that are backed by the federal government) were about to fail, due to declining house prices and rising foreclosures.

The Bush Administration stepped in with a $200 billion economic stimulus package and placed Fannie Mae and Freddie Mac and their $5 trillion in home loans in “temporary conservatorship,” to be supervised by the Federal Housing Finance AgeSeptember 2008 – $50 Billion Stimulus Package To Guarantee Money Market Funds

When the economic crisis reached a crescendo, Americans began to pull their money out of money market funds – historically considered to be the safest investment. To stop the bloodshed, the U.S. Treasury agreed to guarantee up to $50 billion, for up to a year.

September 2008 – $25 Billion Stimulus Package – Automakers Bailout

In an attempt to stave off bankruptcies for the “Big 3 automakers,” the Bush Administration gave General Motors, Ford, and Chrysler $25 billion in low-interest loans.

September – November 2008 – $150 Billion Stimulus Package – AIG Bailout

With the world’s largest insurance company in dire straits and 74 million clients at risk, the American government chipped in and gave AIG (American Insurance Group) $150 billion in a stimulus package that included: loans, purchase of toxic assets, and purchase of preferred shares.

October 2008 – $700 Billion Stimulus Package – Banks Bailout

The Bush Administration, under the umbrella of the U.S. Treasury, committed $700 billion in economic stimulus money under TARP (Troubled Asset Relief Program). By many accounts, if this economic stimulus money hadn’t been injected, credit between banks would have frozen overnight, and not only the American economy, but also the global economy, would have seized up.

———————————————————————————————
Is The Economic Stimulus Package Working?

“Is the economic stimulus package working” seems to be the question on most people’s minds.

But which economic stimulus package are you talking about?

Bear Sterns was taken over by JP Morgan Chase, so maybe that $29 billion economic stimulus plan worked.

We all got our economic stimulus checks in 2008, but we didn’t necessarily put them back into the economy, so that $178 billion might not have been well-spent.

The $300 billion mortgage stimulus, “Hope For Homeowners,” awarded in July 2008 didn’t work very well either, because few people took an interest in the program. While proponents of this particular economic stimulus package estimated that 400,000 homeowners could be helped over a three-year period, in the first month, only 111 had applied.

The $200 billion economic stimulus handout to Fannie Mae and Freddie Mac, the mortgage giants, stabilized them enough to prevent collapse.

The $50 billion economic stimulus to stabilize money market funds might have averted a disaster.

The $150 billion doled out to AIG, the insurance giant, prevented their closure, but must not have completely solved the problem since AIG came back for $30 billion more less than six months later, even as they were awarding $165 million in bonuses to their top executives.

The $25 billion given to the Big 3 automakers, Chrysler, Ford, and GM, allowed them to live to see another day, but they remain on the brink of disaster.

The $700 billion bank bailout, given in extreme haste in October 2008, might have kept the banks functioning, but no one really knows where that money went or what was done with it, so it’s hard to judge whether TARP is working.

$700 Billion Bush Stimulus

The $700 billion Troubled Asset Relief Program, (TARP), given out by the George Bush Administration in October 2008. No one can seem to track down any details on this. The money was given to banks with the goal that they would lend it to people. They didn’t seem to do that, but no accountability was written into the hastily concocted plan, which seems to have been concocted in a matter of days, in a “cocktail napkin” format.

And that was just the economic stimulus packages of 2008.

Written by Padmini Arhant · Filed Under Business, Economy | Leave a Comment 

Bush Stimulus Package

July 23, 2009

By Padmini Arhant

Presentation of Chronological Stimulus Package Details:

From: Stimulus Package Details

Source: http://www.stimuluspackagedetails.com/bush.html – Thanks.

Bush Stimulus Packages

In 2008, the Bush Administration handed out a slew of economic stimulus packages.

Under President George Bush’s administration, the Federal government gave

$29 billion to bail out Bear Stearns,
$178 billion to American taxpayers in the form of economic stimulus checks,
$300 billion to bail out American homeowners,
$200 billion to bail out Fannie Mae and Freddie Mac,
$150 billion to bailout AIG, and
$700 billion to bail out banks (TARP).

Total Bush Administration Bailout – $1.557 trillion dollars i.e. $1 trillion and $557 billion dollars.

Timelines Of The Bush Economic Stimulus Packages

Following is a timeline of the economic stimulus packages, in chronological order.

March 2008 – $29 Billion Stimulus Package – Wall Street Bailout

The Federal Reserve stepped in to prevent the collapse of Bear Stearns (one of the world’s largest investment banks and brokerage firms) by guaranteeing $29 billion worth of potential losses in its battered portfolio. This provided enough economic stimulus for JP Morgan Chase to take over the beleaguered firm.

May 2008 – $178 Billion Stimulus Package – Average American Bailout

The U.S. Treasury provided an economic stimulus package to American taxpayers in the form of $600 economic stimulus checks for individuals and $1,200 economic stimulus payments for couples. That cost the government $100 billion, and they threw in another $68 billion in tax breaks for businesses, $8 billion to increase unemployment benefits from 26 weeks to 39 weeks, and a $4 billion economic stimulus package to be doled out to states and local municipalities to buy and rehab foreclosed properties.

July 2008 – $300 Billion Stimulus Package – Homeowners Bailout

The Bush Administration committed $300 billion for 30-year fixed rate mortgages for at-risk borrowers, as well as tax credits for first-time homebuyers, who could be eligible to receive up to a $7,500 tax credit.

September 2008 – $200 Billion Stimulus Package – Fannie Mae and Freddie Mac Bailout

Fannie Mae and Freddie Mac (privately owned mortgage companies that are backed by the federal government) were about to fail, due to declining house prices and rising foreclosures. The Bush Administration stepped in with a $200 billion economic stimulus package and placed Fannie Mae and Freddie Mac and their $5 trillion in home loans in “temporary conservatorship,” to be supervised by the Federal Housing Finance Agency.

September 2008 – $50 Billion Stimulus Package To Guarantee Money Market Funds

When the economic crisis reached a crescendo, Americans began to pull their money out of money market funds – historically considered to be the safest investment. To stop the bloodshed, the U.S. Treasury agreed to guarantee up to $50 billion, for up to a year.

September 2008 – $25 Billion Stimulus Package – Automakers Bailout

In an attempt to stave off bankruptcies for the “Big 3 automakers,” the Bush Administration gave General Motors, Ford, and Chrysler $25 billion in low-interest loans.

September – November 2008 – $150 Billion Stimulus Package – AIG Bailout

With the world’s largest insurance company in dire straits and 74 million clients at risk, the American government chipped in and gave AIG (American Insurance Group) $150 billion in a stimulus package that included: loans, purchase of toxic assets, and purchase of preferred shares.

October 2008 – $700 Billion Stimulus Package – Banks Bailout

The Bush Administration, under the umbrella of the U.S. Treasury, committed $700 billion in economic stimulus money under TARP (Troubled Asset Relief Program). By many accounts, if this economic stimulus money hadn’t been injected, credit between banks would have frozen overnight, and not only the American economy, but also the global economy, would have seized up.

————————————————————————————————–
Is The Economic Stimulus Package Working?

“Is the economic stimulus package working” seems to be the question on most people’s minds.

But which economic stimulus package are you talking about?

Bear Sterns was taken over by JP Morgan Chase, so maybe that $29 billion economic stimulus plan worked.

We all got our economic stimulus checks in 2008, but we didn’t necessarily put them back into the economy, so that $178 billion might not have been well-spent.

The $300 billion mortgage stimulus, “Hope For Homeowners,” awarded in July 2008 didn’t work very well either, because few people took an interest in the program. While proponents of this particular economic stimulus package estimated that 400,000 homeowners could be helped over a three-year period, in the first month, only 111 had applied.

The $200 billion economic stimulus handout to Fannie Mae and Freddie Mac, the mortgage giants, stabilized them enough to prevent collapse.

The $50 billion economic stimulus to stabilize money market funds might have averted a disaster.

The $150 billion doled out to AIG, the insurance giant, prevented their closure, but must not have completely solved the problem since AIG came back for $30 billion more less than six months later, even as they were awarding $165 million in bonuses to their top executives.

The $25 billion given to the Big 3 automakers, Chrysler, Ford, and GM, allowed them to live to see another day, but they remain on the brink of disaster.

The $700 billion bank bailout, given in extreme haste in October 2008, might have kept the banks functioning, but no one really knows where that money went or what was done with it, so it’s hard to judge whether TARP is working.

And that was just the economic stimulus packages of 2008.

Written by Padmini Arhant · Filed Under Business | Leave a Comment 

National Unemployment and the Economic Status

July 23, 2009

By Padmini Arhant

The ravenous economy has absorbed about $3.7 trillion dollars via bailouts and stimulus plans, (please refer to individual stimulus package topics for breakdown) yet the nation’s jobless rate rising like a tidal wave rather than settling along the shores. Several arguments mounting regarding the precarious job situation across the nation with some fifteen states like California, Michigan, Indiana, Ohio and others experiencing double digit in job losses accumulated over a period of time.

Not surprisingly, criticisms with an ominous prediction such as a possible return of the ‘Great Depression’ from various political and economic factions pouring against the current administration’s level of action and apparent inaction in averting the precipitous decline of the job market.

The irony being, President Obama’s opponents and fierce critics expressing deep concerns over the present generation’s children and grandchildren burdened with the burgeoning multi-trillion dollars national deficit from the ‘supposedly’ bizarre and revolutionary health care reform.

Unfortunately, the pervasive selective memory among the cynics forbids anyone from reminding the junkyard legacy by the previous administration. Nevertheless, it’s important to revisit the situation in order to find a pragmatic and an effective cure for the epidemic unlike a band-aid treatment tactic by the prior administration.

As detailed earlier on many occasions, the wild adventures in the past eight years eroded the fundamentals of the capitalist system. Immediately following the 9/11 attacks, the widespread panic about the United States economic and national security surely had an impact on the American investments ranging from housing to stock market including the exodus of some expatriates selling homes combined with the withdrawal of their investments.

The Bush-Cheney administration laid out the extravagant scheme to trump the situation with yet another war by invading Iraq when the mission in Afghanistan had barely begun. Conservative ideology dictates that wars promote prosperity. Actually, the notion might not be far-fetched because wars are highly beneficial to the nexus group gambling with others’ life and nation’s wealth.

When the administration inheriting a surplus economy engaged in a dubious agenda at the most improper and inconvenient time, the market conditions in 2002 and onwards became more volatile due to enormous speculations surrounding the United States affordability to wage another war.

The Bush-Cheney administration sailed through the storm with false assurances and blatant lies that Iraq war would be self-funded through oil revenues expected to be reaped exclusively by the United States in return for the establishment of democracy.

One must also not forget the administrations’ prophesy on the premature valentine’s day celebration by the cheering Iraqis handing out rose bouquets to the U.S. occupying forces at the expense of their blood and national treasury.

The excessive borrowing commenced at the dawn of the Iraq war with the fiscal conservatives now objecting to their constituents’ health care benefits, then turning a blind eye and signing a blank check to an unarguably a corrupt administration.

Funding two simultaneous wars converted the national surplus to national deficit adversely affecting the Treasury Notes and subsequently the U.S. currency in the international market. In the backdrop of the weakening Bond market, the stock market performance accelerated with investors’ confidence in the growth of different sectors specifically the oil and defense stocks due to the on-going wars, technology sector and the financial sector with hyperbolic balance sheets.

Above all, during that time the Federal Reserve and the Treasury’s overly cautious inflationary measure by reducing the interest rates beyond market conditions and unleashing the free market from necessary regulations in an utter conflict of interest essentially provided a fertile ground for the financial sector to exploit the unique opportunity in the lending activity.

In addition, the conglomerate like AIG and major investment banks extending towards the commercial bank’s activities risking long-term investments for short-term gains induced further competition for the traditional banking sector adopting strategies detrimental to the key components of the economy viz. the housing market, retail and commercial lending.

The financial sector’s unethical and unscrupulous practices in every aspect of lending targeting the nerve of the economic system i.e. the consumer, exacerbated the economic recession.

From the notorious sub-prime mortgages in the housing market now appropriately defined as ‘toxic assets’ bundled into the mortgage backed securities exchanged through international trading, to teaser rates offered on credit card later escalating to atrocious interest rates exceeding market affordability…are primarily responsible for the chronic ailments of the current real estate and the liquidity crisis.

Unequivocally the present woes of the economy are attributable to the overwhelming greed by the financial sector and the defiance for any rule of law until date. As clarified by President Obama during the press conference on date, the financial regulatory reforms are in order.

Since some prominent economists have been recently pushing for more stimulus over and above the total $3.7 trillion dollars, it’s necessary to obtain the facts and details on earlier investments to evaluate the methods applied as a result of the negative economic growth and dismal unemployment rate.

Please refer to stimulus package details followed by careful analysis in the subsequent segments.

Meanwhile, it’s imperative and incumbent on all bailout recipients and the previous administration officials regardless of hierarchy to come forward, testify under oath to Congress as the representatives of the American electorate, and explain exactly where and how the trillions of dollars have been invested.

Is it a coincidence that Goldman Sachs after being assisted by the former Treasury Secretary Henry Paulson in gobbling Bear Stearns and Lehman Brothers, emerges with a bumper profit rewarding its every employee with a despicable amount $700,000 bonus the past week ? – Absolutely not.

It’s about time the criminals of the financial world are brought to justice in order to avoid a twenty first century revolution in the world’s modern democracy.

Congress must act in the interest of the people and abide by the constitutional rule of law with an honest and thorough investigation of the massive bailouts carried out at the expense of the hard working American taxpayers.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business, Economy, Featured | Leave a Comment 

Save the Nations’ Newspapers – OP-ED

April 9, 2009

Like everything else in this economy, the newspaper industry is on the brink of demise. The reasons according to the publishers are the competition from various sources ranging from the Information Superhighway to electronic gizmos producing data with the touch of a button.

The survival of the newspaper industry is paramount in a democracy. It is appropriate to pledge unequivocal support to print press as someone having grown up knowing the world events and current affairs through newspapers. Personally, the newspaper was a window to the outside world and enabled a better understanding of issues unfolding at home and elsewhere. The newspapers offer knowledge, awareness and critical thinking on different topics.

One might argue why subscribe to a newspaper when the same information is accessible on-line free of charge? Although, it is a valid argument, it still does not match the convenience of a newspaper in hand while traveling or commuting to work on public transport and reading in a relaxed manner at home without Google search and browsing Yahoo/AOL articles. Further, the conventional source relieves common stress caused by prolonged use of computers. It is a healthy diversion in a manner books remain popular over audio and video versions.

Some national as well as local newspapers’ editorials, columns and articles are praiseworthy on many issues concerning life. The investigative and independent journalists deserve special recognition for their contribution to humanity due to risks involved in the exposure of subjects that may or may not be challenged in legal terms and otherwise. Similarly, there are reporters providing vital information from war zones and remote corners of the world by endangering their lives. These veteran newsmakers cannot be isolated in this context.

However, it is essential to bring certain issues to the publishers’ attention that could rescue the dying industry. The lack of objectivity in few columns and news articles is one of them. In an era of idolization of political figures, some journalists traveling with public entities tend to edge over the professional ethics and present conflicting content of the same article from other mass media such as television particularly cable news network, international channels and the potent internet. Unfortunately, the authors of such articles fail to recognize the fact that any information from them is verifiable through other sources for authenticity and to an extent affect their credibility if proven false. When they represent a reputable news organization, the conspicuous flaw reveals the devil in the detail magnified on comparison with live images on-line and television. The general public prefer facts not fiction in a newspaper article related to public figures , government affairs and corporate activities.

Another factor behind the decline of the newspaper industry is the ideology driven concept not barring political affiliations and the pandering to the authorities in government and business rather than a neutral position in the presentation of facts to confirm fair and balanced reporting. The educated and technologically savvy mass justifiably turned off by the extreme views and polarization in the newspaper industry. If the internet sources blamed as the major threat to the print press, perhaps it is time for newspaper publishers to exercise the freedom of press and responsible journalism like their on-line competitors and dedicate service to people more than any others in a democracy.

Whenever the press and television newsmedia regardless of the status as mainstream or not assumes the role of personal talking points to the authorities in power, democracy is in jeopardy forcing majority population to seek alternative sources for reliable information. It defeats the purpose of free press in a democracy that prioritizes politics over people, when the primary focus should be accuracy, transparency and accountabilty in public matter.

As stated earlier in numerous blogposts on this website www.padminiarhant.com industries and government ultimately depend on the main street, as they are the consumers and voters with real power in a functioning democracy.

On that note, a sincere request to all citizens across the nation to salvage the local and favorite newspaper through subscription since the survival of newspaper industry means restoration of voice in a democracy.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business, Featured | Leave a Comment 

Bailout Débācle

March 22, 2009

By Padmini Arhant

The past two weeks dominated with AIG and oligarchs debating over the controversial $165 million and now increased to $218 million bonuses to executives instrumental in driving the insurance giant to the brink of collapse along with the financial markets of the world.

As usual, Washington vs. Wall Street dispute contributed to media frenzy and aptly reflected in the roller coaster performance of the stock market. The interesting factor in the blame game is those pointing fingers at others fail to acknowledge that remaining fingers are pointing towards them as they are equal partners in this charade.

By now, well-educated American taxpayers upon the quest to secure their future convinced that both Wall Street and Washington have serious credibility issues in wealth management and nation governance.

The back and forth allegations in the political crossfire reveals the true sense of Washington politics and Wall Street free market systemic corporate management failure. Again, the beneficiaries in this deal are the legislators responsible for the bailout approval and the corporations rewarded with taxpayer’s funds for unprecedented incompetence in modern economic times.

They are the beneficiaries because the legislators secured their emoluments by rushing the operating budget $410 billion omnibus bill ladened with pork projects to the tune of $8 billion to curb ‘government shut down’ rather than passing the required operating budget and isolating the earmarks spending for individual scrutiny through separate legislation.

The Corporate executives in due diligence spared no opportunities to collect remuneration, bonuses retrospectively and in the foreseeable future to maintain their status among the top 10% wealthiest hierarchy.

Let’s not forget in the Darwinian "Survival of the fittest contest" the weak, fragile and frail average taxpayer doesn’t stand a chance against the ferocious Corporate executives (compared to sharks) and Capitol Hill crusaders.

Events unfolding in the entire scenario deserves attention from every citizen involuntarily pledged to carry the burden of national debt currently projected at $9.3 trillion i.e. $1 trillion budget deficits every year for a decade, 2010-2019.

It is worth examining the role of legislators, corporations and lobbyists in securing taxpayer bailouts more prevalent in the past year 2008 and continuation of it in 2009. Prior to the diagnostic procedure, it is essential to shed light on the alliances forged by the key cabinet members and Wall Street merchants.

According to http://www.wsws.org/articles/2008/sep2008/paul-s23.shtml – Thank you.

Published by the International Committee of the Fourth International (ICFI)

Who is Henry Paulson?

By Tom Eley, 23 September 2008

Henry Paulson rose through the ranks of Goldman Sachs, becoming a partner in 1982, co-head of investment banking in 1990, chief operating officer in 1994. In 1998, he forced out his co-chairman Jon Corzine “in what amounted to a coup,” according to New York Times economics correspondent Floyd Norris, and took over the post of CEO.

Goldman Sachs is perhaps the single best-connected Wall Street firm. Its executives routinely go in and out of top government posts. Corzine went on to become US senator from New Jersey and is now the state’s governor. Corzine’s predecessor, Stephen Friedman, served in the Bush administration as assistant to the president for economic policy and as chairman of the National Economic Council (NEC). Friedman’s predecessor as Goldman Sachs CEO, Robert Rubin, served as chairman of the NEC and later treasury secretary under Bill Clinton.

Agence France Press, in a 2006 article on Paulson’s appointment, “Has Goldman Sachs Taken Over the Bush Administration?” noted that, in addition to Paulson, “[t]he president’s chief of staff, Josh Bolten, and the chairman of the Commodity Futures Trading Commission, Jeffery Reuben, are Goldman alumni.”

Prior to being selected as treasury secretary, Paulson was a major individual campaign contributor to Republican candidates, giving over $336,000 of his own money between 1998 and 2006.

Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March,

Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.

These bailouts have been designed to prevent a chain reaction collapse of the world economy, but more importantly, they aimed to insulate and even reward the wealthy shareholders, like Paulson, primarily responsible for the financial collapse.

Paulson bears a considerable amount of personal responsibility for the crisis.

Paulson, according to a celebratory 2006 Business Week article entitled “Mr. Risk Goes to Washington,” was “one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits.” Under Paulson’s watch, that meant “taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities.”

According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”

Paulson then handsomely benefited from the speculative boom. This wealth was based on financial manipulation and did nothing to create real value in the economy. On the contrary, the extraordinary enrichment of individuals like Paulson was the corollary to the dismantling of the real economy, the bankrupting of the government, and the impoverishment of masses the world over.

Paulson was compensated to the tune of $30 million in 2004 and took home $37 million in 2005. In his career at Goldman Sachs he built up a personal net worth of over $700 million, according to estimates.
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Washington and Wall Street Analysis:

By Padmini Arhant

The beginning of the chain link usually found on the campaign trail, when corporations fund election campaigns through donation loopholes despite contribution limits by electoral commission and reign in on the successful candidate for the entire term.

After all, in the contemporary world focused on “What’s in it for me” deals, there is no free lunch with the exception of debt-consumed public yearning for believable change and better future offer available resources in terms of time, energy and money during the electoral process and beyond.

Who gets preference by the elected officials in the so-called democracy?

Indeed the Corporations due to the inter-dependency of sweetheart deals and brokering that take place throughout the election campaign. The deafening noise in the Capitol Hill about identifying the guilty party and pursuing disastrous course of action such as 90% tax on AIG bonuses after having approved without any stipulations predictably backfired at the victims none other than the average American taxpayers, presumably the majority shareholder at 80% of the multinational conglomerate.

In a bizarre development, more appropriately deterioration of the bailout fiasco, the headlines, news across the nation reverberate…
—————————————————————————————————–
AIG sues its biggest shareholder – us

By David S. Hilzenrath, Washington Post – March 21, 2009. Thank you.

As AIG takes billions of dollars from the federal government to stay afloat, it is suing the government for millions more.

The big insurer is trying to recover $306.1 million of taxes, interest and penalties from the Internal Revenue Service. Among other things, AIG is contesting an IRS determination last year that the company improperly claimed $61.9 million of tax credits associated with complex international transactions.

AIG has also asked a court to make the government reimburse it for money spent suing the government.

Given that the government owns 79.9 percent of AIG and has been using taxpayer money to fill a seemingly bottomless hole at the company, the lawsuit might seem like a case of biting the hand that feeds it. But an

AIG spokesman said the company has an obligation to press its case.

AIG believes it overpaid the IRS, and it “has a duty to its shareholders, including the government and other shareholders, to insure that it pays the proper amount of taxes,” spokesman Mark Herr said by e-mail.
Washington tax lawyer Martin Lobel agreed with that assessment.

‘If in fact they honestly believe that they’re entitled to a refund of those taxes, it would be a breach of their fiduciary duty not to” sue, Lobel said.

“On the other hand, the sense of entitlement from AIG is awesome,” Lobel said.

Because the dispute pits the government against a company that has essentially become a ward of the government, the only clear winners are likely to be lawyers, legal experts said. The legal expenses could consume millions of dollars, they said.

Lawyers at the firm Sutherland Asbill & Brenan, which is representing AIG, did not respond to an interview request.

For partners of similar stature to those representing AIG, fees can run $700 to $900 an hour, said Dan Binstock, managing director of BCG Attorney Search, a legal recruiter.

AIG’s dispute with the IRS focuses on taxes for 1997 and dates at least as far back as March 2008.”
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L.A. congresswoman defends actions

Husband Linked to Bank that got AID

By Richard Simon – Los Angeles Times – March 14, 2009 – Thank you.

Excerpts from the article:

Rep. Maxine Waters, D-Los Angeles, on Friday defended her efforts to help minority-owned banks – including one with ties to her husband – scoffing at the notion that she, a liberal Democrat, could influence George W. Bush’s presidential administration in deciding what financial institutions would receive bailout funds.

Waters, a senior member of the congressional committee that, oversees banking, has come under scrutiny because OneUnited Bank, on which her husband Sidney Williams had been a board member and stockholder, received $12 million in bailout funds. The money was provided in December, three months after Waters helped arrange a meeting between officials from the bank and other minority-owned institutions and Treasury representatives.

“I followed up on the association’s request by asking Treasury Secretary (Henry) Paulson to schedule such a meeting, as did other members of Congress,” she said.

She said she did not attend the meeting. She released letters by the National Bankers Association requesting the meeting and following up on it – signed by the group’s incoming Chairman Robert Patrick Cooper an officer with OneUnited.

Waters said the decision to provide bailout funds to OneUnited was “based on the merits of the bank’s request, not based on anything said at the September meeting and not based on political influence.”

She said that she has fully disclosed her husband’s ties to the bank. Williams served on the bank board until early last year and held at least $500,000 in investments in the bank in 2007, the most recent year for which public financial disclosure statements are available.

Waters could not be reached for an interview Friday. OneUnited Chief Executive Kevin Cohee said Friday he didn’t have time to speak with a reporter.

Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said she found Waters’ behavior “inappropriate and certainly has the appearance of impropriety, even if it doesn’t rise to the level of an actual conflict-of-interest under House rules.”

Sloan said Waters’ comments that the meeting focused on the general problems of minority-owned banks “don’t seem credible” in light of statements from Treasury officials that the session became a discussion of one bank’s troubles. “At a minimum, Treasury officials should have been apprised of her interest in the bank before the meeting took place.”

Waters’ efforts, she said, raise a question: “How many members of Congress are having meetings with the Treasury Department pleading for funds for certain banks?”

“Treasury has said they’re going to list the lobbying contacts,” Sloan said.”
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Voice of the Electorate:

San Jose Mercury News – Readers’ Letters – March 18, 2009

Obama’s earmarks stance disappoints

I am disappointed that President Barack Obama backed off his campaign pledge to eliminate earmarks. The process subverts democratic government by avoiding votes on specific issues. It encourages our representatives to compete to spend more—if they fail to “bring home the bacon,” they may be seen as ineffective and not be re-elected. The further we move from specific votes for specific programs, the less inclined people are to support the government and the more inclined to resist taxes.

We must promote responsible stewardship. While many of the projects are meritorious, that hardly means they should be funded. Tax dollars are a scarce resource and every expenditure should be carefully scrutinized. Obama was right on this issue during the campaign; he is sliding off track now.

Christopher K. Payne

Stanford
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Ethical Lapse

By Padmini Arhant

The sparring political factions, the far left and the far right along with the centrists is in a strange dilemma today as they witness their reflection in the image of the accused parties in the most expensive soap opera entertainment.

As more Washington and Wall Street scandals are exposed, the more disingenuous the legislators appear to be in their pledge to turn the nation around.

An average citizen struggling to make ends meet asked the following questions –

“Why should I vote for anyone in the next election when I see politics as usual prevailing over the promised inevitable change?

Can the elected officials with public housing, guaranteed regular and several other sources of income, supreme health care, and free transportation relate to the suffering population dealing with job loss, foreclosure and other miseries?”

Unfortunately, the Washington atmosphere is secluded as elitist not making connection with the plight of the populist. The deepening of the recession combined with the multi-trillion dollar national debt forecast is a matter of great concern for the vast majority of population in precarious economic conditions due to job insecurity and declining prospects all around.

The American electorate enthusiastically elected the new administration with the hope to experience the “change” they deserve and the recent events are adversarial to the optimism built during the campaign.

Campaign promises involved Accountability, Transparency and changing Washington by eliminating corruption, cronyism and conventionalism. The passing of the $787 billion stimulus bill and subsequently the $410 billion omnibus spending bill loaded with earmarks confirms the status quo in Washington.

The pet projects, however meritorious they might be, cannot be more important than supplementing K-12 educational funding by retaining qualified teaching professionals and providing after school sports activities for students from lower income families and scores of other important social services for the constituents in California and other states.

It is obvious throughout the legislative process from the authorization of illegal invasion of Iraq war to Wall Street bailouts that lawmakers as representatives of the electorate in a democracy no longer consider it important to peruse the budget and other legislative bills because of the voluminous content. Hence, hastily resort to wasteful spending at taxpayers’ expense.

With the national debt projection in multi-trillion dollars, the wasteful spending in billions doesn’t seem to matter to the sponsors of the pet projects. Apparently, $8 billion added to the national debt for projects experimenting swine odor, road to nowhere, monuments ‘supposedly creating jobs’ when the industries are crumbling apart clearly signifies misplaced priorities by the legislators expected to be in touch with reality of their respective constituency.

The people are hurting and their mere existence is challenged by the hour while Washington and Wall Street continue to engage the nation in burgeoning financial crisis through legal and constitutional confrontations of the bailout débācle.

Perhaps it is time for the victims and the lame duck, the average taxpayers to rise to the occasion and execute power in the mid-term election to restore democratic values, ethical and moral standards desperately lacking in the corporate and political system.

It is best to eradicate the narcissistic culture that permeates the surroundings like weeds destroying the grassland and fertile grounds.

Evidently change is necessary and necessity is the mother of invention.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business, Economy, Featured | Leave a Comment 

We need to fix our economy

January 30, 2009

President Obama and his administration are trying to address this serious economic crisis at home.

It takes the entire nation to get involved in the rescue operation.

Let us come together and do everything possible to revive the economy.

Please standby for some important guidelines and suggestions for economic recovery on www.padminiarhant.com.

Also, focus on resolving California’s budget crisis will be presented on the website shortly.

Meanwhile, please follow through the request from President Obama’s administration to create awareness and collective effort required to survive the crisis.

Thank you.

Padmini Arhant

———————————————————————————–

Last year, America lost 2.6 million jobs. This week, some of our biggest companies announced plans to cut tens of thousands more.

The economic crisis is deepening, but President Obama and members of Congress have proposed a recovery plan that will put more than 3 million Americans back to work.

You can learn more about how the plan will help your community by organizing an Economic Recovery House Meeting.

Join thousands of people across the country who are coming together to watch a special video about the recovery plan. Invite your friends and neighbors to watch the video with you and have a conversation about your community’s economic situation.

The economic crisis can seem overwhelming and complex, but you can help the people you know connect the recovery plan to their lives and learn more about why it’s so important.

Sign up to host an Economic Recovery House Meeting the weekend of Friday, February 6th.

The President’s plan passed the House of Representatives on Wednesday. But if it’s going to move forward, we need to avoid the usual partisan games.

That’s why supporters are opening their homes to talk with neighbors and friends about how the plan will work — and what it means for their community.

The video will outline the basics of the plan and how it will impact working families. It will also include answers to questions from folks across the country. Invite your friends and family to watch the video, discuss the plan, and help build support for it.

Don’t worry if you’ve never hosted a house meeting before — we’ll make sure you have everything you need to make it a success.

Take the first step right now by signing up to host an Economic Recovery House Meeting:

http://my.barackobama.com/recoveryhost

Time and again, you’ve demonstrated your commitment to change. Now you can help America move in an important new direction.

Please forward this email to your friends and family, and encourage them to get involved as well.

Thank you for your hard work,

Mitch

Mitch Stewart
Director
Organizing for America

Written by Padmini Arhant · Filed Under Business, Economy | Leave a Comment 

Radio Show Update

January 24, 2009

Schedule Update:

January 24, 2009, Air time – 8.00 – 10.00 P.M(PST)

Category: Current Events

Topic: Wall Street Bailout

Discussion:

What should financial institutions do with taxpayers’ bailout?

Why haven’t the financial institutions invested funds to stimulate economy?

What is public demand from them and the legislators?

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January 25, 2009,  Air Time 2.00 – 4.00P.M (PST) – (5.00 – 7.00P.M EST)

Topic: Free Palestine

Discussion:

1. How can we help to expedite independent state for Palestinians free of Israeli blockade, occupation and aggression?

2. What should the new administration do to be a trustworthy partner and unbiased peace broker in the Middle East conflict?

3. How can we help Israeli population elect a moderate government in early February favoring peace and diplomacy over military action for their national security and sovereignty?

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January 30, 2009, 120 minutes 2.00P.M – 4.00P.M – Cancelled due to restrictions on segments at frequent intervals.

Category: Current Events

Topic: Economy and Health Care – Please refer to blog post on www.padminiarhant.com for details and I invite you to post comments.

What should the new administration do for you and the economy?

How do we fix the Health Care system?

———————————————————————————-

Podcast live : http://www.blogtalkradio.com/Padmini-A

Guest Call-in-number: (646) 727 -3778

I invite you all to participate in the public forum and share your concerns, ideas and knowledge.

Your comments and thoughts are welcome in the political discourse.

Let us keep democracy alive and help our new President Barack Obama and Vice President Joe Biden in rebuilding our nation.

Your participation is a huge encouragement and always appreciated – Thank you again.

Look forward to the session.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business | Leave a Comment 

Radio Show Schedule

January 22, 2009

I will be doing a live radio show for 120 minutes from 2.00P.M to 4.00P.M. (PST) on the following days:

January 23, 2009 Friday from 2.00 – 4.00 P.M (PST) to accommodate listeners from all time zones.

Category: Current Events

Topic: Corporate Bailout

Discussion:

What should financial institutions do with the taxpayers’ bailout?

Why have they not utilized those funds to stimulate economy?

What is public demand from them and the legislators?

———————————————————————

January 30, 2009, 120 minutes 2.00P.M – 4.00P.M

Category: Current Events

Topic: Economy and Health Care

What should the new administration do for you and the economy?

How do we fix the Health Care system?

———————————————————————————-

Podcast live : http://www.blogtalkradio.com/Padmini-A

Guest Call-in-number: (646) 727 -3778

I invite you all to participate in the public forum and share your concerns, ideas and knowledge.

Your comments and thoughts are welcome in the political discourse.

Let us keep democracy alive and help our new President Barack Obama and Vice President Joe Biden in rebuilding our nation.

Look forward to the session.

Thank you.

Padmini Arhant

P.S. My apologies for not being able to schedule a convenient time on January 21, 2009. I am aiming to provide as much time as possible through whatever avenues available in getting us back on our feet.

Your participation is a huge encouragement and always appreciated – Thank you again.

Written by Padmini Arhant · Filed Under Business | Leave a Comment 

Banks Bailout – Accountability

January 11, 2009

It’s been a quarter since the banks bailout. The purpose of the bailout was to stimulate the economy by relieving the financial markets from liquidity crisis.

At least, that was the explanation offered by the Treasury Department and the Federal Reserve at the time of request.

They demanded that Congress approve the bailout to a tune of $700 billion as an emergency measure to avert the collapse of the financial market.

There were few stipulations to the approval of the bailout. The general expectation was to revive the housing market with a moratorium on foreclosures and overhauling of the existing loan programs to assist homeowners with affordable payments and ease the decline of the housing prices nationwide.

The other alternative to the housing market crisis was to utilize the bailout drawdown towards restructuring of the mortgage backed securities by allowing default homeowners dealing with foreclosures to refinance at the existing lowest market rate for a fixed period of two years, substituting the amount in the new economic stimulus package by President-elect Obama.

Despite financial bailout by taxpayers, the economic situation is deteriorating with the current unemployment soaring to 7.2 percent exceeding the Depression era. The criticism entirely directed towards government intervention in the revival process.

However, it is worth remembering that lack of oversight and accountability led the financial institutions to a dire state in the free market economy. The corporate executives as the beneficiaries have been responsible for the dysfunctional financial system even though none of them held accountable thus far.

The current administration assured taxpayers that financial bailout targets liquidity in the credit market, housing market decline particularly foreclosures, buy-back mortgage securities held as major liabilities on the banks’ financial reports and ease their burden to facilitate lending to homeowners and small businesses.

If the strategy followed through, it could have reduced the heat on the economy and set the pace for recovery.

In the absence of commitment by the banks, it would be appropriate for taxpayers to demand that the financial institutions release the funds towards lending and contribute to the economic stimulation as agreed to by them.

Failure to adhere to the agreement will result in the blockade of the remaining $350 billion that would be appropriated towards economic stimulus proposal by President-elect Obama.

In addition, the taxpayers’ also reserve the right to demand that the beneficiaries of the bailout return the earlier withdrawal currently hoarded for their undisclosed agenda with interest higher than the market rate.

It is time for checks and balances on the drawdown of $350 billion to various financial institutions.

Checks and Balances:

Have the objectives been achieved?

Is there an oversight committee on the financial bailout as agreed to the taxpayers?

Did the banks provide details of the secured amount to the taxpayers or the oversight committee?

Please be sure to read the articles presented below as they confirm the reality.

Thank you.

Padmini Arhant

————————————————————————————————————

First and foremost, the beneficiaries of the bailout are:

As per http://moneynews.newsmax.com/streettalk/bailout_half_gone/2008/11/12/150364.html

Street Talk – Thank you.

Who Got Bailout Money So Far?

Wednesday, November 12, 2008 9:09 AM

"The Treasury Department’s $700 billion bailout plan, also known as the Troubled Asset Relief Program (TARP), is one of the main U.S. tools to address the financial crisis.

The Treasury Department on October 14 set aside $250 billion of the program to buy senior preferred shares and warrants in banks, thrifts and other financial institutions.

Half that money was allocated to nine big banks, the Treasury Department has said.

Another $38 billion has since been earmarked for regional or small banks, according to statements from individual banks.

On Monday, the department announced its single-biggest TARP investment — $40 billion in American International Group — which the government said would not come from the $250 billion bank capital program.

———————————————-
The TARP has so far committed the following funding:

AIG $40 billion

JPMorgan $25 billion

Citigroup $25 billion

Wells Fargo $25 billion

Bank of America $15 billion

Merrill Lynch $10 billion

Goldman Sachs $10 billion

Morgan Stanley $10 billion

PNC Financial Services $7.7 billion

Bank of New York Mellon $3 billion

State Street Corp $2 billion

Capital One Financial $3.55 billion

Fifth Third Bancorp $3.45 billion

Regions Financial $3.5 billion

SunTrust Banks $3.5 billion

BB&T Corp $3.1 billion

KeyCorp $2.5 billion

Comerica $2.25 billion

Marshall & Ilsley Corp $1.7 billion

Northern Trust Corp $1.5 billion

Huntington Bancshares $1.4 billion

Zions Bancorp $1.4 billion

First Horizon National $866 million

City National Corp $395 million

Valley National Bancorp $330 million

UCBH Holdings Inc $298 million

Umpqua Holdings Corp $214 million

Washington Federal $200 million

First Niagara Financial $186 million

HF Financial Corp $25 million

Bank of Commerce $17 million

TOTAL: $203.08 billion

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INSURANCE COMPANIES

In addition to the TARP program’s $40 billion capital injection into AIG, the Federal Reserve is providing the company with up to $112.5 billion in separate loans and funds for asset purchases.
Aid to the huge insurance company came after counterparties and rating downgrades forced AIG to post large amounts of collateral for its credit derivatives positions.
Some other insurers are interested in cash infusions, but must own a thrift or bank in order to qualify under the terms of Treasury’s current capital injection program.

—————————————————————————–
BANKS, LENDERS

The TARP program set a November 14 deadline for smaller banks to apply for capital injection funds remaining in the pool of $250 billion. The deadline will be extended for non-publicly traded banks.

The government’s preferred shares will pay dividends of 5 percent annually for the first five years and 9 percent after that until the institution repurchases them. Participating banks must comply with Treasury restrictions on executive compensation, which limit tax deductibility of senior executive pay to $500,000.

They require bonuses to be "clawed back" if earnings statements or gains are later proven to be materially inaccurate and prohibit "golden parachute" payments to senior executives.”

—————————————————————–

The following article has the response for all of the above issues:

December 23, 2008.

Economy in Crisis: By Matt Apuzzo, Associated Press, Washington – Thank you

Banks mum on bailout spending – They Refuse to provide Accounting

Elizabeth Warren, the congressional watchdog, appointed by Democrats—

“It takes a lot of nerve for banks not to give answers, she says.”

Think you could borrow money from a bank without saying what you were going to do with it?

Well, apparently when banks borrow from you they don’t feel the same need to say how the money is spent.

After receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending it. Some won’t even talk about it.

“We’re choosing not to disclose that,” said Kevin Heine, spokesman for Bank of New York Melon, which received about $3 billion.

Thomas Kelly, a spokesman for JPMORGAN Chase, which received $25 billion in emergency bailout money, said that while some of the money was lent, some was not, and the bank has not given any accounting of exactly how the money is being used.

“We have not disclosed that to the public. We’re declining to,” Kelly said.

The Associated Press contacted 21 banks that received at least $1billion in government money and asked four questions:

How much has been spent?

What was it spent on?

How much is being held in savings? And,

What ‘s the plan for the rest?

None of the banks provided specific answers.

“We ‘re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks, which got $3.5billion in taxpayer dollars.

Some banks said they simply didn’t know where the money was going.

“We manage our capital in its aggregate,” said Regions Financial spokesman Tim Deighton, who said the Birmingham, Ala.- based company is not tracking how it is spending the $3.5billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion – about the size of the Netherlands’ economy – to help rescue the financial industry.

The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money.

Lawmakers summoned bank executives to Capitol Hill last month i.e. November 2008, and implored them to lend the money – not to hoard it or spend it on corporate bonuses or junkets or to buy other banks.

But there is no process in place to make sure that’s happening, and there are no consequences for banks that don’t comply.

“It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there’s no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings to the $700 billion bailout in October, 2008.

And the Treasury Department, which doles out the money, never asked banks how it would be spent.

“Those are legitimate questions that should have been asked on Day One,” said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress.

“Where is the money going to go to?

How is it going to be spent?

When are we going to get a record on it?”

Nearly every bank the AP questioned – including Citibank and Bank of America, two of the largest recipients of bailout money —– responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

A few banks described company-specific programs, such as JPMorgan Chase’s plan to lend $5 billion to nonprofit and health care companies next year.

Richard Becker, senior vice president of Wisconsin-based Marshall & Ilsley, said the $1.75 billion in bailout money allowed the bank to temporarily stop foreclosing on homes.

But no bank provided even the most basic accounting for the federal money.

Some said the money couldn’t be tracked.

Bob Denham, a spokesman for North Carolina-based BB&T, said the bailout money “doesn’t have its own bucket.”

But he said taxpayer money wasn’t used in the bank’s recent purchase of a Florida insurance company.

Asked how he could be sure, since the money wasn’t being tracked, Denham said the bank would have made that deal regardless.

Others, such as Morgan Stanley spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity.

When the AP refused, Ramirez sent an e-mail saying:

“We are going to decline to comment on your story.”

Most banks wouldn’t say why they were keeping the details secret.

“We’re not sharing any other details. We’re just not at this time,” said Wendy Walker, a spokeswoman for Dallas-based Comerica, which received $2.25 billion from the government.

Lawmakers say they want to tighten restrictions on the remaining, yet-to-be-released $350 billion block of bailout money before more cash is handed out.

Treasury Secretary Henry Paulson said the department is trying to step up its monitoring of bank spending.

Warren, the congressional watchdog, appointed by Democrats, said her oversight panel will try to force the banks to say where they’ve spent the money.

“It would take a lot of nerve not to give answers,” she said.

But Warren said she’s surprised she even has to ask.

“If the appropriate restrictions were put on the money to begin with, if the appropriate transparency was in place, then we wouldn’t be in a position where you’re trying to call every recipient and get the basic information that should already be in public documents,” she said.
——————————————————————————————

Written by Padmini Arhant · Filed Under Business | Leave a Comment 

Auto Rescue Plan – $17.4 Billion

December 22, 2008

The White House decision to honor and acknowledge the plight of American workforce is praiseworthy.

During tough economic times, important decisions made to protect national interest is the best action for a nation dealing with crisis in all fronts.

Failure to avert the collapse of the huge manufacturing sector would have led to dire consequences with ripple effect on national and subsequently global markets.

For all those concerned about the erosion of free market system,

They must realize that the free market system with no oversight or regulations was heading towards a free fall denting the economic infrastructure with respect to financial and manufacturing sector.

The revival of sluggish economy is dependent on stabilizing the commercial sector providing millions of jobs that are in steady decline due to mismanagement, lack of accountability and corporate greed in many instances.

Therefore, the recent governmental intervention is necessary to restore investor and consumer confidence at all levels which in turn would contribute to the anticipated economic stimulus.

However, it is disappointing to note that the White House has unfairly targeted the United Auto workers (UAW) union with disproportionate demands such as,

Ref: Various news reports…

1.“The UAW union asked to rework contracts to make wages and work rules comparable with those at nonunion plants in the United States owned by foreign automakers by December 31, 2009.

2. The UAW asked to accept stock rather than cash for the billions of dollars of pension and retiree health care liabilities shifted from the companies to the union.”

The success and failure of any organization lies with management of capital and resources available to the head of the company responsible for the entire workforce.

Stock performance is dependent on the viability of the company based on executive decisions leading productivity to profitability.

Hence, shifting the entire burden of liabilities to labor rather than management reflects cohesion with the corporate executives primarily responsible for the precipitous losses suffered by the manufacturing sector.

With the loan granted to GM and Chrysler, it is imperative for not only these two automakers but also the entire auto industry to move towards energy efficient preferably environment friendly automobiles to free the nation from energy dependence and environmental hazards.

Overall, the rescue plan is the step in the right direction to protect nearly a million jobs in the auto industry.

Such action to salvage the American workforce will pay off through consumer spending, an essential catalyst for economic recovery.

As for the bailout precedence, it is noteworthy that the grim reality of accelerating unemployment and liquidity freeze in the credit market prompted similar action.

Finally, it is incumbent on the financial institutions to respond to the urgency of the economic revival by reinstating responsible lending practices to businesses with sound management focused on profitable ventures.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business | 1 Comment 

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