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March 23rd, 2009
09:52 AM ET

Morning Buzz: Lifestyles of the Rich and Shameless

Penny Manis
AC360° Senior Producer

The Obama Administration formally unveils the next big step in its plan to help out banks by persuading private investors to buy billions in toxic assets that have blown up balance sheets.

The goal: to make it easier for banks to start lending again and ease the credit crunch. These toxic assets are mostly mortgages gone bad and Tim Geithner will make the announcement soon. Ali will be up at the wall to explain it in plain English for you!

Randi kicks off a new theme, “Lifestyles of the Rich and Shameless.” She went on a bus tour in Connecticut this weekend with 40 activists and regular ‘everyday’ folks who want to see how the ‘other half’ lives as they try to deliver a letter to a couple of AIG executives at their multi-million dollar homes. This should be interesting!

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Filed under: Penny Manis • The Buzz
March 23rd, 2009
09:39 AM ET

Financial Policy Despair

The New York Times
Paul Krugman

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

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Filed under: Economy • President Barack Obama
March 23rd, 2009
09:37 AM ET

Dear President Obama #63: He who laughs first, may not laugh long

Reporter's Note: Another week begins, and so continues my quest to write a letter a day to the White House. President Obama has asked for advice, and far be it from me to leave the suggestion box empty.

Tom Foreman | Bio
AC360° Correspondent

Dear Mr. President,

One of the lessons in life that I have been slow to learn, is that some people have a hard time taking you seriously if you are laughing.

The late night host Dick Cavett tells a story: A stodgy blue-blood confronts him at a party. “Why you have all these great thinkers, scientists, writers, and world leaders on your program and you make it a laughingstock! You sit there grinning, cracking jokes, and making it clear you don’t have a serious thought in your head.” To which Cavett replies, “Sir, do not think that because I am frivolous that I am shallow; any more than I think that because you are grave you are profound.” I’m sure I butchered the story, and my apologies for that, but I’ve thought of that tale many times.

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March 23rd, 2009
09:36 AM ET

Obama's own rules bog down staffing

Gloria Borger
CNN Senior Political Analyst

Tim Geithner may be the latest political piñata in Washington these days, but - policy aside - there may be another reason he is the one fellow everyone is picking on at Treasury: He's there alone.

Believe it or not, Geithner is the only confirmed official at his department. Some top nominees, even those who have served in government before, have decided to withdraw. Others are still pending as they go through arduous background checks that one pro-Obama Democrat calls "maddening vetting hell."

Sure, this is about extensive scrutiny to make sure no one has a tax problem after Geithner's own embarrassing unpaid tax bill. But the staffing problem is not just at Treasury, and it goes way beyond the time-consuming nature of extensive background checks.

It's also about overreaching anti-lobbyist rules.

Consider Tom Malinowski. He's the advocacy director for Human Rights Watch, an expert on genocide and torture. But when it came time for a top human rights job at the State Department, he was turned away.

Keep Reading...

March 23rd, 2009
09:22 AM ET

The bonus tax is just plain stupid

Come October I'll have no incentive to work anymore.

The Wall Street Journal
Jonathan Clements

Like Bernie Madoff, I've got the government coming after my money. Unlike Madoff, I didn't do anything wrong.

The House of Representatives, alas, thinks otherwise. Last Thursday, 328 members voted for a bill that would slap a 90% surtax on my bonus, with Ways and Means Committee Chairman Charles Rangel dismissing the payout I received in January as "repugnant to everything that decent people believe in." The Senate is considering a similar bill.

All of this might come as a surprise to those of you who recognize my byline. Until a year ago, I was The Wall Street Journal's personal-finance columnist - and widely considered to be a friend of the ordinary investor.

But that was then. In April 2008, I left to join a new Citi venture. (What follows are my views - not those of Citigroup Inc.) For the past year, I thought I was involved in building a wonderful, customer-friendly business that minimizes conflicts of interest, favors index funds, and helps everyday Americans with their entire financial lives.

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Filed under: Economy • Taxes
March 23rd, 2009
09:15 AM ET

Will Obama tax plan hurt religious groups?

USA Today
Karin Hamilton, Religion News Service

President Obama's proposed 2010 federal budget contains a 7% cut in charitable tax deductions for the nation's wealthiest taxpayers. Some religious groups are asking how that will affect their bottom line.

The answer: it depends who you ask.

Here's what it means in real terms for the 5% of Americans whose household income exceeds $250,000 a year. Those families can currently save $350 in taxes for every $1,000 donated to charity; under Obama's plan, that amount would drop to $280 per $1,000 donation.

"By doing this, you raise the cost of giving" said Roberton Williams, a senior fellow at The Tax Policy Center, a liberal Washington think tank.

By Williams' calculations, the change will result in a 10% drop in charitable giving by wealthy Americans, who typically contribute about 20% of all charitable dollars. In real dollars, Williams projects a decline of about $6 billion in charitable donations because of the change.

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Filed under: Economy • President Barack Obama • Religion
March 23rd, 2009
09:10 AM ET

The Wealth Gap Gets Wider

The Root

The chips are in. Every three years, the Federal Reserve, in its Survey of Consumer Finances, takes a look at how households in the United States are doing and reports on our assets and liabilities. The euphoria of our gambling spree is over. In the harsh glare of morning, the hangover’s tough. And the data are from 2007, so they don’t even capture the worst of the decline.

The net worth of the average American family is less than it was in 2001. We borrowed more for that trip to Vegas than we brought home. Everyone knows this now.

But here’s something that is being talked about much less: The gap between the wealth of white Americans and African Americans has grown. According to the Fed’s data, for every dollar of wealth owned by the typical white family, the African American family has only one thin dime. In 2004, it had 12 cents.

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Filed under: Economy • Race in America
March 23rd, 2009
09:10 AM ET

EPA: Global warming threatens public health, welfare

Juliet Eilperin
The Washington Post Staff

The Environmental Protection Agency sent a proposal to the White House Friday finding that global warming is endangering the public's health and welfare, according to several sources, a move that could have far-reaching implications for the nation's economy and environment.

The proposal - which comes in response to a 2007 Supreme Court decision ordering EPA to consider whether carbon dioxide and other greenhouse gases should be regulated under the Clean Air Act - could lay the groundwork for nationwide measures to limit such emissions. It reverses one of the Bush administration's landmark environmental decisions: In July 2008 then-EPA administrator Stephen Johnson rejected his scientific and technical staff's recommendation and announced the agency would seek months of further public comment on the threat posed by global warming pollution.

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March 23rd, 2009
09:07 AM ET

Oakland – it's time to back the badge

San Francisco Chronicle
Chip Johnson

The deaths of four Oakland police officers gunned down in the line of duty Saturday afternoon are undisputable, immutable, irrevocable proof of the chaotic level of predatory violence on the streets of this city.

Even as crime dipped in the first three months of the year, gun violence has continued largely unabated – and now it has claimed the lives of four police officers.

The shootings of Sgt. Mark Dunakin and Officer John Hege during a seemingly routine traffic stop in East Oakland, and Sgts. Daniel Sakai and Ervin Romans two hours later as they burst into an apartment looking for the killer, will have lasting repercussions for a city already regarded as one of the most violent in the country.

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Filed under: Crime & Punishment
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