Sunday, February 22, 2009

Unemployment Rates in the States Where the Governors Reject Federal Unemployment Assistance

We noted the silly argument made by Louisiana’s governor as to why he wants to turn down the $98 million in federal unemployment assistance – which amounts to less than 2% of the total stimulus going to his states. CNN reports that Jindal has company:

Though they support some federal action to help their states recover from the recession, several Republican governors said Sunday they plan to turn down a portion of what's offered in the stimulus bill that President Obama signed last week. "If we were to take the unemployment reform package that they have, it would cause us to raise taxes on employment when the money runs out -- and the money will run out in a couple of years," Mississippi Gov. Haley Barbour told CNN's "State of the Union" on Sunday. The Republican governors of Idaho, Alaska, Texas, South Carolina and Louisiana have expressed similar concerns.

I guess Barbour got the same talking points that were given to Jindal. Steve Benen reports on the nonsense coming from the governor of South Carolina:

As for Sanford's notion of a "fundamental misdiagnosis," what does the South Carolinian believe is the wisest course of action? "When times go south you cut spending," Sanford recently explained. "That's what families do, that's what businesses do, and I don't think the government should be exempt from that process." It is Neo-Hooverism in its most obvious form.

As these governors decide that the unemployed of their states are less important than a little political pandering to the rightwing, maybe we should check with this source as to how much the unemployment rate has increased from December 2007 to December 2008:

Alaska: 6.5% to 7.5%

Idaho: 2.7% to 6.4%

Louisiana: 4.0% to 5.3%

Mississippi: 6.3% to 8.0%

South Carolina: 6.2% to 9.5%

Texas: 4.2% to 6.0%

Asian Investors Refuse to Buy Fannie and Freddie Debt Without Explicit Guarantees

Bloomberg is reporting that Asian investors won’t buy debt and mortgage-backed securities from Fannie Mae and Freddie Mac until they carry explicit U.S. guarantees, similar to those given on bonds issued by Bank of America Corp. or Citigroup Inc. This even after President Barack Obama vowed on Feb. 18 to sink as much as $400 billion of capital into Fannie Mae and Freddie Mac, double the original commitment.

Foreign investors sold $170 billion of agency debt and securities in the second half of 2008, the largest amount since the Treasury began tracking sales in 1977, according to the most recent data. Asians, the biggest non-U.S. block of owners in the category, unloaded $70 billion worth from July through December, after scooping up $55 billion in the second quarter and being net buyers during much of the last decade. “The U.S. government is worried about the agency market, and market participants feel the same way,” said Kei Katayama, head of the foreign fixed-income group in Tokyo at Daiwa SB Investments Ltd.

Japanese institutions like Fukoku Mutual Life Insurance Co., once big buyers of US agency securities, spent last year trimming “risky assets,” and sold all agency holdings in the third quarter, said Satoshi Okumoto, general manager at the company in Tokyo, apparently because agency securities are now considered "risky assets".

The Blankenhorn-Rauch peace proposal on marriage

In today's N Y Times, there is a jointly-authored proposal for a compromise on marriage by David Blankenhorn (self-described liberal anti-gay marriage advocate) and Jonathan Rauch (self-described gay conservative). There's probably a good chance that you've already read it, given the placement and the strange bedfellow authors; if not, you should. The op-ed is likely to be the beginning of an effort to build support for this approach. Look for a panel on it later in the spring at Brookings, where Rauch is a fellow.

Blankenhorn and Rauch call for a federal law that would make these changes:

Recognize as civil unions all same-sex couples who have married or registered in their states for civil unions, and extend federal marriage benefits and duties to this group;
Condition this recognition on the states according "robust religious conscience exceptions" for religious organizations that object to same-sex marriage; and
Enact new federal provisions that shield religious organizations from federal law penalties if they refuse to recognize same-sex marriages.
First, credit where credit is due: this proposal will break the ice and hopefully start a useful conversation that focuses on a federal law geared to benefits. And, it cannot have been easy for these two voices to have reached agreement. I credit them both with good faith and good intentions.

That said, I've got problems.

As I’ve said before, I support federal recognition of civil unions as the best next step to take on relationship recognition. And I also support some degree of opt-out, in some situations, for churches/synagogues/mosques and the next concentric circle out of sectarian organizations. But there are two big pieces of this proposal that I can’t go along with.

First, if federal law is going to continue to follow state law for the purpose of defining who is eligible when a federal program requires marriage, then it should recognize as marriages – not as civil unions – the Mass and CT and other same-sex marriages that are legal under state law. Following the status recognized by the state has always been the federal approach.

If that is going to change, as Blankenhorn and Rauch propose, then federal law should create a federal civil union status - independent of state law - as the eligibility requirement for federal programs. It would, as a federal status, be open to couples who qualify regardless of whether their state of residence recognizes civil unions. And note that I didn't say "gay couples" - a federal civil union status should be open to both straight and gay couples.

Second, satan is truly in the details of their proposal for a “robust” exception for religious belief. It was striking to me that the op-ed completely omitted any discussion of the impact when non-church (etc) entities – like charities or hospitals with a religious affiliation – accept public funds. When all of our tax dollars are supporting these organizations, then all of us have a legitimate concern about the services they provide.

Consructing a fair op-out system should reflect the spectrum of American social institutions from the wholly religious faith group or congregation, on one end, to public agencies and the marketplace on the other. We need ways to allow for religious zones in a secular culture, without imposing religious litmus tests on public functions.

The most important aspect of the Blankenhorn-Rauch proposal is that it implicitly establishes what I agree is the right threshold for moving out of gridlock: support for civil unions that are materially equal to marriage, paired with some degree of opt-outs for entities that are thoroughly religious.

I also agree with creating a national legal landscape in which gay couples living in states that recognize marriage equivalents like civil unions can get federal as well as state equality as to the material aspects of marriage. LGBT rights advocates can still pursue access to marriage itself on equal terms, which I also support, since the difference in designation is obviously intended to function as a signaling device for communicating second-class status. But those battles would be fought against a background and baseline of having had the material benefits already equalized. The outcomes will continue to be different in different states until the Supreme Court weighs in. Don't hold your breath.

Of course, neither my nor their proposal does anything to deal with legal recognition for non-marriage-like relationships, like those found in extended families or when non-sexual partners make serious commitments to each other (often among elders). But I have come to believe that unknotting the marriage issue is a necessary first step. For better or worse (sorry), I don’t think that we will ever get to the other issues until after the frenetic sugar-high anxiety and emotion of the marriage issue seems more resolved than it is now. Once that happens, there will be more political and cultural space to think beyond marriage.

NAACP Calls For Firings of NY Post Editor, Cartoonist

The furor over the NY Post's editorial cartoon featuring a dead chimp killed by police continues as the NAACP called for the resignation of Post editor-in-chief Col Allan and cartoonist Sean Delonas, as well as anyone else "involved in the decision to print the image."

The Post made a sort-of apology for the cartoon, which shows a fatally shot chimp and one cop saying, "They'll have to find someone else to write the next stimulus bill"—which prompted many to think this was an allusion to President Obama, who is closely associated with the stimulus package (the Post claimed it was "meant to mock an ineptly written federal stimulus bill"). NAACP President Benjamin Todd Jealous wasn't convinced, calling the cartoon "an invitation to assassination" and that it "picks off the scabs of all the racial wounds."

NAACP Chairman Julian Bond said the cartoon represented "thoughtlessness taken to the extreme. ... Anyone who is not offended by it does not have any sensitivity." When the AP asked the Post for comment, the Post referred to the "apology" editorial. The NAACP website is collecting complaints to the Post. And the NAACP is celebrating its centennial this year; it was created in Springfield, IL after a race riot in 1908.

President's Budget To Slash Deficits, Raise Taxes On The Wealthy

The President is expected this Thursday to release a budget that will slash the deficit in half by raising taxes on wealthy Americans and reducing spending on the wars in Iraq and Afghanistan.

The nation's deficit this year is expected to reach $1.5 billion, the largest deficit as a percentage of the nation's economy since the end of World War II.

In his weekly radio address, the President promised that his budget would be "sober in its assessments, honest in its accounting, and that lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline."

The budget outline is expected to nearly halve the deficit by the end of the President's term, an anonymous official told Reuters.

"The deficit this administration inherited was $1.3 trillion or 9.2 percent of GDP. By 2013, the end of the president's first term, the budget cuts the deficit to $533 billion or 3.0 percent of GDP."
Reducing spending on the war in Iraq could realize savings of around $90 billion, while additional revenue will be generated by allowing parts of the Bush tax cuts of 2001 and 2003 to expire. Wealthy Americans making over $250,000 could expect the highest tax rate to return to 39.6 percent, although the tax rate on capital gains and dividends would remain at 20 percent.
On Tuesday the President will make a speech before a join session of Congress explaining the necessity of running short-term deficits to confront the ongoing recession.

"Obviously in the immediate future with the economy the way it is and the banking system the way it is and the housing situation the way it is, it’s not a time to worry about balancing the budget – and I say that as a confirmed deficit hawk," Robert Bixby, Director of the Concord Coalition, told Politico.

The President's full budget will be released in April.

A New Low for America: Hillary Begs China to Buy U.S. Debt

US Secretary of State Hillary Clinton Sunday urged China to keep buying US debt as she wrapped up her first overseas trip, Breitbart reports.

"By continuing to support American Treasury instruments the Chinese are recognising our interconnection. We are truly going to rise or fall together," Clinton said at the US embassy here.

This, by the way, is the exact opposite of what Treasury Secretary Geithner said was U.S policy, during his confirmation hearings, where he called for China to stop propping up the dollar (which would mean less purchases of Treasury securities).

Is Hillary striking off on her own? Unlikely.

More than anything, it's another example of Geithner being in over his head.

Somewhere between 5% and 10% of the market decline since the Obama Administration has taken over has to be the blamed directly on Geithner.

As for China, it is the top holder of US Treasury bills, with 696.2 billion dollars worth of the securities at the end of December.

According to Bretbart, while taping an interview on a Chinese talk show, Hillary focused on the need for China to help finance the massive 787-billion-dollar US economic stimulus plan by continuing to buy US Treasuries.

"Because our economies are so intertwined the Chinese know that in order to start exporting again to its biggest market, the United States had to take some very drastic measures with this stimulus package," Clinton said.

"We have to incur more debt. It would not be in China's interest if we were unable to get our economy moving again."

Clinton added: "The US needs the investment in Treasury bonds to shore up its economy to continue to buy Chinese products."

Hillary said on Saturday after meetings with China's leaders that Beijing was still confident in US Treasury bonds and expressed Washington's appreciation for the investments.

Wait for the Treasury bubble to burst, then we will see how happy China is with ts Treasury portfolio.