The spill, triggered by an April 20 explosion aboard the Deepwater Horizon drilling rig, which Transocean Ltd. leased to London-based BP. Halliburton provided cementing services on the well BP was drilling. Halliburton Chief Executive Officer David Lesar said in May that the company is fully indemnified from costs related to the spill.

derived of about 13 percent of its North American revenue from the Gulf of Mexico in the first quarter. Last month, Halliburton said it planned to relocate workers and equipment to other markets as appropriate.

Halliburton ended last week at $27.51 in New York Stock Exchange composite trading, leaving the shares 17 percent lower than before the rig blast.

Rifts exist between key players but signs are that an agreement is close.

More demonstrations are expected after protests in London’s financial district on Wednesday.

The summit is being held, amid tight security, at the Excel Centre in London’s Docklands.

Leaders will hold a working breakfast and then the wrangling will begin in earnest.

In the run-up to the summit, the main differences have been between France and Germany, who are seeking stricter regulation of the financial system, and the UK and US, who think extra government spending would do more to ease the crisis.

France’s president, Nicolas Sarkozy, has threatened to walk out of the meeting if the G20 did not come up with concrete results.

However, BBC economics editor Stephanie Flanders says that the G20 is close to an agreement.

The main disputes are financial rather than ideological, our correspondent says.

Police said that 5,000 demonstrators attended Wednesday’s protests, which carried on late into the night.

One man collapsed and died at the protest, police said.

They were largely peaceful although demonstrators stormed a branch of RBS and scuffled with police.

Police said that 32 people were arrested and one officer was admitted to hospital.

Six police forces are part of the £7.5m G20 security plan, led by London’s Met.

The demonstrators include anti-capitalist protesters, environmental campaigners and anarchists, who say they want changes to how the global economy is run.

The recession has worsened since G20 leaders met last November in Washington.

Both the IMF and the World Bank expect the world economy to shrink for the first time in decades this year.

The summit is expected to push for closer supervision of hedge funds, private equity firms and derivatives trading.

Tax havens are also likely to be targeted.

There are also calls for countries to step up spending on stimulus packages to boost recovery but specific commitments look unlikely given opposition from France and Germany.

The G20 groups the world’s most powerful economies, accounting for 90% of the world’s economic output. 80% of world trade and two thirds of the world’s population.

Attorney General Richard Blumenthal’s office received the documents late Friday after issuing a subpoena.

Blumenthal says the documents show that 73 people received at least $1 million apiece, and five of those got bonuses of more than $4 million. The financially ailing insurance giant has been under fire for giving bonuses after receiving more than $182.5 billion in federal bailout money.

AIG spokesman Mark Herr declined to comment Saturday. Now there’s a shocker!

Blumenthal said the newly revealed number will “further fuel the justified anger and revulsion that people feel.”

There’s many ways we can save on energy in our businesses. There is the old usual’s like:

Lower thermostats

Turn off lights your not using

Then there is the rebate area of the 2009 energy tax refund:

Purchase or replace items such as Exit Signs with energy efficient products.

Lightbulbs, heating units. Most of your energy upgrades can be a tax break.

Those big huge exit signs, we see every where at every outside door is a 24 hour must to pubic safety and a 24 cost to you on your electric bill.

There’s the silent killer, vampires, they are in most of your electronics and suck energy even though you have shut them off, unplug them to be sure they aren’t being sneaky and eating up a portion of electricity.

So just a few helpful hints and there are MANY more, remember to shut off lights, lower heating and put on warmer clothes.

Enjoy a rebate by replacing your daily use items with energy efficient models, light bulbs, your Exit Sign, electronics, even your computers can be green!

So go ahead and save the world today, Ok, maybe just for now save your self some much needed cash in your pocket by being a little more friendly to a very tired planet.

A mother with already six children at home, decided she wanted another, went to a fertility clinic and was impregnated with eight embryos.

Kaiser Permanente’s Bellflower Medical Center reports that all is well with the mother and children. Seven babies are breathing unassisted, and one is receiving assisted oxygen through a tube in the nose. Seven are being tube-fed donated breast milk.

The Physician may be looked into for his ethics on this case. In most cases a woman is given one to five(max) embryos for in vitro, depending on her age. Five being of the age of forty and over. This procedure not only put the mother of six at risk, the already born babies for risk to be without a mother, but the new six at risk also.

Its also rumored that she has since splitting from her companion,on welfare, so now the tax payer has to be financially responsible for her children.  Her home looks to be a trailer, if not its not much bigger than a single wide. That is unhealthy and unsafe for a family of six, let alone fourteen babies!

This has to be looked into and find out why this was allowed to happen. Of course the new Born’s aren’t at fault, but the mother and her doctor should be looked at very closely. In this day of financial troubles, to even think of such a selfish act is to me just horrendous, and selfish.

Republican Stampede

State officials said it could help reduce long lines at unemployment offices and cut down on the number of mistakes by people applying online.

“We’re going work with all the faith-based and community-based organizations that would like to, and the local libraries, to provide unemployment filing training so that they know the basics of what the filing process looks like,” said Workforce Development Commissioner Teresa Voors.

Indiana residents must apply online to get up to $390 a week. Many people apply at home or at libraries using Internet-accessible computers, and those who need extra help can go to a local unemployment office for assistance filling out the online application.

The state hopes that training more volunteers at churches and libraries — and loaning 200 surplus state computers to community groups — will give unemployed workers more convenient options.

Police in Whitehall, east of Columbus, responded to a call around 2 p.m. Wednesday and found the bodies of Mark Meeks, 51; his wife, Jennifer Dallas-Meeks, 40; and children Jimmy, 5, and Abbigail, 8.

“We’re confirming all four victims had gunshot wounds, and a gun was found at the scene,” Sgt. Dan Kelso said.

A suicide note purportedly written by Meeks also was found at the scene, but police are not releasing the note’s contents, Kelso said.

Authorities believe Meeks shot his wife and two children and then himself, Kelso said.

It was the second time this week that a family died in an apparent murder-suicide. On Tuesday, the bodies of Ervin Antonio Lupoe, his wife and five children were found in their Los Angeles, California, area home after Lupoe faxed a letter to a local television station explaining that he and his wife had lost their jobs and felt it was better to end their lives.

Police resisted the suggestion that the killings were motivated by finances or job loss.

“Out of respect for the family, detectives are not releasing the actual motive, but it’s not financial, and he was employed,” Kelso said.

The vice president of operations at Immke Northwest Honda, where Meeks was a service manager, confirmed that he was a current employee.

“We as a dealership decline to comment on this devastating tragedy, except to say that all of us here at Immke Northwest Honda are very sad and our condolences go out to the family,” Tom Spicer said.

Meeks’ brother said the family was struggling to come to terms with the possibility that his older brother — a lifelong car buff and devoted family man who adored his wife and children — could be responsible for their deaths.

“They were just great people, and they seemed to be an extremely close family,” Mike Meeks said. “I like to say they were so close they were mushy; they showed affection toward each other and their kids.”

Meeks said that he last saw his brother about three weeks ago when he came by to pick up firewood and that he seemed happy, giving no clue that anything was amiss.

The final vote was 244 to 188. No Republicans voted for the bill, while just 12 Democrats voted against it.

The Senate is likely to take up the bill next week.

“I hope that we can continue to strengthen this plan before it gets to my desk,” Obama said in a statement after the vote. “We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”

In floor debate earlier, House Democrats offered near-unanimous support for the bill, touting the package’s ability to quickly create jobs and jumpstart economic growth.

“One week and one day ago, our new President delivered a great inaugural address … which I believe is a great blueprint for the future,” said House Speaker Nancy Pelosi, D-Calif. “With swift and bold action today, we are doing just that — with this vote today, we are taking America in a new direction.”

But Republicans, who are outnumbered in the House, have pushed back, expressing concern about the large amount of spending in the bill, and have criticized the tax cut provisions for not going far enough.

“The underlying bill, while it has some good provisions, has a lot of wasteful provisions and slow-moving spending in it,” said House Minority Leader John Boehner, R-Ohio. “We have to act — we have to heal the ailing economy. The question is how to do it best; we think that fast-acting tax relief is the way to get it done.”

The House voted down a Republican amendment, which would have cut a significant portion of the bill’s spending and greatly expanded the amount of tax cuts in the bill.

Obama spent much of his first week as president rallying support for the bill. After meeting with congressional leadership of both parties on Friday, he met with Republican congressional leaders on Tuesday and a dozen CEOs on Wednesday.

Obama and House Democrats etched out plans for a stimulus package in the weeks leading up to the president’s inauguration. Two House committees amended and added some provisions, resulting in $607 billion in direct pending and appropriations and $212 billion in tax cuts.

Next week, the full Senate will vote on its version. The House and Senate bills will be different and need to be reconciled. Then, both chambers would have to vote on the final version in the coming weeks.

Congress has put the legislation on a fast track, as many lawmakers on both sides of the aisle agree that fast action is needed to help pull the economy out of a deep recession. Both Democratic and Republican leaders have said they aim to get the bill to Obama’s desk for him to sign before lawmakers’ Presidents’ Day recess in mid-February.

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.
The bank used TARP funds to purchase a new corporate jet for executives.

The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X — one of nine to be flying in U.S. skies — as a smart business deal.

The jet, the epitome of corporate prestige and privilege, can carry 12 passengers in elegant comfort.

ABC News has learned that on Monday officials of the Obama administration called Citigroup about the company’s new $50 million corporate jet and told execs to “fix it.”

(CNN) — Two days before President-elect Barack Obama is officially sworn in, House Speaker Nancy Pelosi made clear she disagrees with the incoming administration on at least two issues.

Obama has indicated he is not interested in repealing President Bush’s tax cuts for wealthy Americans before they expire in two years or investigating past actions of the Bush administration.

But speaking on Fox News Sunday, Pelosi said she wants Congress to consider repealing tax cuts on those who make over $250,000 immediately and is pushing for a congressional investigation into whether the Bush administration illegally fired federal prosecutors two years ago.

On taxes, Obama’s stimulus plan does not call for repealing president’s tax cuts for wealthier individuals, even though the president-elect had said he would during the presidential campaign. Former Treasury Secretary Larry Summers, a top Obama economic advisor, also suggested Sunday that repealing Bush’s tax cuts will not be a priority.

But Pelosi said Sunday she wants the incoming president to stick to his campaign pledge.

“We had campaigned in saying what the Republican Congressional Budget Office told us: Nothing contributed more to the budget deficit than the tax cuts for the wealthiest people in America,” Pelosi said in the interview.

A spokesman for Senate Minority Leader Mitch McConnell called Pelosi’s statement “false,” and cited a recent fact check from the St. Petersburg Times disputing the House Speaker’s claim tax cuts for the wealthy is the biggest contributor to the budget deficit.

Pelosi said she would not seek to block the president-elect’s stimulus plan over its lack of tax hikes for the rich, but she urged Obama to not to simply let the tax cuts expire in two years.

“[Tax cuts on the wealthy] have to prove their worth to me as to how they grow the economy, how they create jobs,” she said.

Pelosi also pushed for an investigation into the Bush administration’s handling of the Justice Department, despite pledges from Obama and his aides not to focus on the administration they are succeeding.

“I think that we have to learn from the past, and we cannot let the politicizing of, for example, the Justice Department, go unreviewed,” Pelosi said. “Past is prologue.”

Foreclosures rose 81% in 2008, ensnaring 2.3 million U.S. households during the year, according to RealtyTrac Inc. data released today.
Advertisement

The Irvine, Calif.-based foreclosure Web site said December filings rose 17% from November and by 41% from December 2007 levels.

Michigan ranked sixth nationwide with 145,365 filings on 106,058 properties, up 21.6% from 2007 and up 107.9% from 2006, RealtyTrac said.

And Wayne County fell to 10th place from first place for 2007 with 38,106 foreclosure filings, down 7.7% from 2007. The rest of metro Detroit, including Oakland, Macomb, St. Clair, Lapeer and Livingston counties, ranked in 25th place with 30,817 filings, up 42.6% from 2007.

The big jump in December foreclosure activity was somewhat surprising given the moratorium enacted by both Freddie Mac and Fannie Mae, and lender programs meant to delay foreclosure actions against distressed homeowners, said James J. Saccacio, chief executive of RealtyTrac.

Nevada, Florida and Arizona had the highest foreclosure rates in 2008, while California had the highest number of properties with a foreclosure filing at 523,624.

While Michigan has had flat foreclosure activity for a few months, it is too early to say whether the state has hit bottom, said RealtyTrac spokesman Daren Blomquist. “The one thing that makes me hesitant to say it will continue on that trend is we are seeing the higher unemployment rate and that could spark some more foreclosures,” he said.

Michigan’s unemployment rate was 9.6% in November.

Bank repossessions rose 19.3% to 55,801 in Michigan last year compared with 46,780 in 2007, Blomquist said. “People had fewer options to refinance. The credit crunch combined with lowering home values really gave people fewer options to avoid foreclosure,” he said.

Blomquist said that bank repossessions in November declined by 8% nationwide and by 2% in Michigan, showing the possible impact of the Freddie Mac and Fannie Mae moratorium for the holidays.

But when that artificial cap is lifted Jan. 31, many expect a flood of bank repossessions as distressed homeowners are unable to pay their mortgages.

“Once the 31st comes, I have heard that we will get triple the number of foreclosures,” said Joe Dakroub, owner and broker of Dearborn-based ERA Dynasty.

There are some good signs for the start of a turnaround in 2009, said Alexis McGee, president of Foreclosures.com, a Sacramento, Calif.-based Web site.

Housing affordability is better than it’s been in years, mortgage rates are low, minimal new housing construction and a growing U.S. population will inch up demand and unemployment is still below the highs of the early 1980s.

McGee said that Michigan bank repossessions have leveled off at roughly 5,000 per month in recent months.

“What I’m looking at right now is a stabilizing of the Michigan area based on foreclosure filings today,” McGee said. “But if we have big unemployment in Michigan, that will change.”

Professor Peter Morici, a former chief economist

Professor Peter Morici is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on  CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.

His recent article in the Faculty Opinion is a very interesting read. He wrote:

January 9, 2009

Economy Loses 524, 000 Jobs in November
The Economy Is in a Depression

Today, the Labor Department reported the economy lost 524,000 payroll jobs in December, and average employment was 1.3 million lower in the fourth quarter than in the third quarter. The economy is the jaws of a depression.

The economy has shed 2.6 million jobs since December 2007, as the full weight of the banking crisis, trade deficit with China and burdens imposed by high-priced imported oil are bearing down on manufacturing, construction and the broader economy with unrelenting pressure.

Unemployment increased to 7.2 percent in December; however, factoring in discouraged workers, unemployment is closer to 9.4 percent. Add workers in part time positions that cannot find full time employment and the hidden unemployment rate is 14.5 percent.

Recession or Depression?

The economy contracted at about five percent annual rate in the fourth quarter. The real question is whether the economy is in a recession or depression?

Recessions are like stock market corrections—after a time, equity prices rebound without government intervention. Federal Reserve interest rate cuts and stimulus tax rebates and spending have shortened the lives and eased the impact of post-World War II recessions, but those policies did not end them. The economy self corrected.

A depression is not self-correcting. Roosevelt Administration stimulus packages—huge deficit spending—eased the pain but failed to end the Great Depression. Roosevelt’s policies did not put the U.S. economy on a sustainable growth path, because New Deal policies worsened structural problems that pulled the economy down in the first place. For example, the New Deal proliferated monopoly pricing, extended the life of undersized farms, raised structural savings rates, and created a system of home lending too dependent on federally sponsored banks.

The challenges facing President-elect Barack Obama could not be clearer. The current economic slowdown has two structural causes—bad management practices at the large money center banks and the huge foreign trade deficit. These problems are not self-correcting.

The economy will not recover without fundamental changes in banking and trade policy. A large stimulus package, though necessary, will only give the economy a temporary lift but then unemployment will rise again and continue at unacceptable levels indefinitely without successively larger stimulus packages and huge federal budget deficits. The economy is a depression, not a recession

To accomplish lasting prosperity, President-elect Obama will have to fix the banks and the trade deficit. Obama must ensure that the banks use the trillions of dollars in federal bailout assistance to renegotiate mortgages and make new loans to worthy homebuyers and businesses. Obama must make certain that banks do not continue to squander federal largess by padding executive bonuses, acquiring other banks and pursuing new high-return, high-risk lines of businesses in merger activity, carbon trading and complex derivatives.

Industry leaders like Citigroup have announced plans to move in those directions. Many of these bankers enjoyed influence in and contributed generously to the Obama campaign. Now it remains to be seen if a President Obama can stand up to these same bankers and persuade or compel them to act responsibly.

In addition, Obama must address the huge cost of imported oil and trade deficit with China or any effort to resurrect the economy is doomed to create massive foreign borrowing, another round of excessive consumer borrowing, and a second banking crisis that the Treasury and Federal Reserve will not be able to reverse.

Ultimately, reducing the oil import bill will require higher mileage standards for automobiles and assistance to automakers to accelerate the build out of alternative, high mileage vehicles. Fixing trade with China will require a tax on dollar-yuan transactions if China continues to refuse to stop subsidizing dollar purchases of yuan to prop up its exports and shift Chinese unemployment to the U.S. manufacturing sector.

Near term, a stimulus package focused on infrastructure is critical for resuscitating growth. The recent round of tax rebate checks ended up in savings accounts or spent at the Wal-Mart on Chinese goods, and did little to create jobs or accelerate growth. Whereas projects to repair roads, rehabilitate schools and refurbish public buildings would create high-paying jobs at home and provide a legacy in capital improvements that assist growth now and in the future.

However, stimulus spending, alone, won’t fix what’s broke. It didn’t end the Great Depression. Japan has had a succession of stimulus spending over the last two decades and that has failed to restore its economic dynamism. Similarly, President-elect Obama’s massive stimulus package, alone, won’t fix the U.S. economy. He must also reach into the management of the banks, and dramatically reduce U.S. dependence on imported oil and the trade deficit with China. The alternative is economic stagnation or worse, a long and deepening depression.

Without fixing the banks, energy and trade with China, the stimulus package will give the economy a temporary lift, but then unemployment will rise again. The economy would then require progressively larger stimulus packages, and foreign borrowing to finance them, to keep Americans employed. Eventually, the foreign line of credit would run out, and widespread unemployment, depression and economic decline would follow.

Wages and Unemployment

In December, wages rose a modest 5 cents per hour, or 0.3 percent. Wage pressures pose little threat to accelerate inflation.

The unemployment rate was 7.2 percent in December, up from 6.8 percent in November. However, these numbers belie more fundamental weakness in the job market. Discouraged by a sluggish job market, many more adults are sitting on the sidelines, neither working nor looking for work, than when George Bush took the helm. Factoring in discouraged workers, who have left the workforce, and those forced into part time employment owing to the lack of full time work, the unemployment rate is about 14.5 percent.

During the presidential campaign, declining real wages and fewer adults working gave Barack Obama’s proposals to redistribute income through the tax system a lot of traction. However, those policies will do little to correct the fundamental systemic problems that are destroying good jobs and squeezing middle class families, even if they would make them feel better for a little while.

Going forward, solutions that create better jobs will require cutting the trade deficit by at least half to substantially boost domestic manufacturing, solving the problems of the large money center banks to get mortgage money flowing and housing construction going again, and energy policies that more aggressively develop alternative fuel sources, conserve oil, and open up new domestic fields for conventional oil and gas production. Reducing dependence on foreign oil requires doing all things environmentalists want us to do and all things environmentalists don’t want us to do.

Politically correct promises to create millions of new jobs producing alternative fuels makes effective presidential campaign slogans, but realistic policies for governing require aggressive development of more conventional oil and gas, as well as nonconventional energy sources, and efforts to improve the energy efficiency of personal transportation.

If the Democrats are not willing to drill for more oil off shore and take on the automobile industry’s resistance to significantly higher mileage vehicles, the U.S. economy will be even more indentured to Persian Gulf oil exporters at the end of President-elect Obama’s first term than it is today.

Finally, diplomacy has failed to redress the currency issue with China. If President Obama is not willing to take tough steps to redress the trade imbalance with China and reduce oil imports, together the Persian Gulf oil exporters and China’s sovereign wealth funds may be able to buy the New York stock exchange eight years from now. Americans, outside those working for the New York banks that facilitate this sellout, will find their best futures waiting on tables for Middle East and Chinese tourists.

Manufacturing, Construction and the Quality of Jobs

Going forward, the economy will add some jobs for college graduates with technical specialties in business, health care, education, and engineering. However, for high school graduates without specialized technical skills or training and for college graduates with only liberal arts diplomas, jobs offering good pay and benefits remain tough to find. For those workers, who compose about half the working population, the quality of jobs continues to spiral downward.

Historically, manufacturing and construction offered workers with only a high school education the best pay, benefits and opportunities for skill attainment and advancement. Troubles in these industries push ordinary workers into retailing, hospitality and other industries where pay often lags.

Construction employment fell by 101,000 in December. This is a terrible indicator for future GDP growth. Retailing shed 67,000 thousand jobs, and financial services lost 10,000 jobs.

Manufacturing lost 149,000 jobs, and over the last 105 months, manufacturing has shed more than 4.3 million jobs. The trade deficit with China and other Asia exporters are the major culprits.

The dollar is too strong against the Chinese yuan, Japanese yen and other Asian currencies. The Chinese government intervenes in foreign exchange markets to suppress the value of the yuan to gain competitive advantages for Chinese exports, and the yuan sets the pattern for other Asian currencies. Similarly, Beijing subsidizes fuel prices and increasingly requires U.S. manufacturers to make products in China to sell there.

Ending Chinese currency market manipulation and other mercantilist practices are critical to reducing the non-oil U.S. trade deficit, and instigating a recovery in U.S. employment in manufacturing and technology-intensive services that compete in trade. Neither President Bush nor Congressional leaders like Charles Rangel and Chuck Schumer have been willing to seriously challenge China on this issue, and Senators McCain and Obama appeared comfortable with continuing their approaches during the campaign.

Now President-elect Barack Obama must alter his position, and get behind a policy to reverse the trade imbalance with China, or preside over the wholesale destruction of many more U.S. manufacturing jobs. These losses have little to do with free trade based on comparative advantage. Instead, they deprive Americans of jobs in industries where they are truly internationally competitive.

In the end, without assertive steps to fix trade with China, as well as fix the banks and curtail oil imports, the Bush years will seem like a walk through the park compared to the real income losses Americans will suffer during the Obama years.

Instead, were the trade deficit cut in half and the banks fixed, manufacturing would recoup at least 2 million jobs, U.S. growth would exceed 3.5 percent a year. Real wages and domestic savings would climb, and the federal government would receive more revenues to balance its budget or address other pressing domestic needs.

The choices for the new president are simple. It’s either recovery or depression. Fix the banks, trade with China and energy policy or become America’s Nero.

For more articles of the pending 2009 year:

Articles by Prof. Peter Morici: 2009

Make way for yet another stimullus

WASHINGTON (UPI) — The U.S. unemployment rate jumped to 7.2 percent in December with a loss of 524,000 more jobs in the month, the U.S. Labor Department said Friday.

That pumped the jobs lost in the final quarter of 2008 to 1.9 million, the department said.

The department said that snce the recession began in December 2007, there have been 3.6 million jobs lost, bringing the number of unemployed to 11.1 million.

The monthly report said job losses were “widespread across most major industry sectors.”

In addition, workers categorized as working part time for economic reasons — sometimes called “involuntary part-time workers” — reached 8 million in December, a jump of 3.4 million over the past year.

In December, the manufacturing sector shed 149,000 jobs, the largest monthly decline in that sector since August 2001. Construction lost 101,000 jobs, and is now down nearly 900,000 jobs since the fall of 2006.

In the month, 67,000 retail jobs were lost, adding to a total of 522,000 retail job losses for the year, most of them erased in the second and third quarter, the department said.

In December alone, automobile dealerships shed 22,000 jobs. Furniture and home furnishing jobs shrank by 8,000, while electronics and appliance stores cut 5,000 jobs in the month.

Wholesale jobs also shrank, down 30,000 through the month and 164,000 through the year.

Obama is meeting with top legislators from both parties including House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., as well as Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio.

Obama is also planning to deliver a major speech on the economy on Thursday. He will propose roughly $300 billion in tax cuts for individuals and businesses. He has not publicly put a price tag on his overall stimulus plan, though his advisers have said they expect it to fall between $675 billion and $775 billion, 40% of which would be in tax cuts.

Middle-class tax cut: Obama would offer a tax cut equal to $500 a year for individuals and $1,000 for couples. The credit would work essentially as a payroll tax credit, meaning the money could be delivered fairly quickly. Companies could simply reduce the tax they withhold from employees’ paychecks.

The tax credit is likely to be offered only to those below a certain income level, but the Obama team hasn’t specified where the cut-off point would be. The credit also would be refundable, meaning that even tax filers without any tax liability — typically very low-income workers — would receive one.

Business break for losses: Obama is considering a tax break for businesses that book losses in 2008 and 2009.

The stimulus plan may extend what’s called the net-operating loss carryback to five years, up from two years currently. The provision lets companies apply their losses to past and future tax bills so that they can get money back on taxes they’ve already paid or would otherwise have to pay.

Job creation: Obama would establish a new credit for businesses that either create jobs in the United States or or avoid layoffs.

Small business write-off: Obama would increase the amount of expenses small businesses can write off to $250,000 in 2009 and 2010, up from $125,000 currently.

While political observers believe the now-added emphasis on business tax cuts as a major part of a stimulus package is one way the Obama team hopes to attract Republican support, that’s not how the Obama camp sees it.         Read More….

The White House upped its commitment to bail out the American auto industry, moving late on Monday to send General Motors Corp. and its financing arm another $6 billion in federal money.

The new money brings the total of taxpayer-backed support to the carmakers to $23.4 billion.

The latest move comes after the Bush administration supported a $17.4 billion loan package less than two weeks ago to prop up GM and Chrysler LLC through March 2009 as part of an effort to encourage the industry to restructure. The administration acted after a bill supported by the White House and congressional Democrats was blocked by Senate Republicans wary of sending billions in taxpayer dollars to a struggling industry.

GM and Chrysler had both warned of their dire financial situations, with GM cautioning that it could not survive December without financial help. Ford Motor Corp., in the strongest financial situation of the Big Three automakers, will not receive federal money.

The Treasury Department will purchase a $5 billion equity stake in GMAC, the financing arm of GM, to spur lending to help consumers purchase cars. The money will come from the $700 billion financial rescue package that was intended originally for financial institutions. Treasury Secretary Henry Paulson had at first strongly opposed using the money for the auto industry.

An additional $1 billion will go to GM that will in turn use the money to buy stock in GMAC.

GMAC was approved for bank holding status last week, meaning it will be regulated by the Federal Reserve Bank. The move gives it a stronger claim to access for funds under the financial rescue package, the Troubled Asset Relief Program.

Paulson had intended to leave the last $350 billion of TARP funds to President-elect Obama’s administration, but the new $6 billion commitment raises questions about whether the administration will seek access to the money before Obama takes office. The administration must seek congressional approval for access to the rest of the money, but lawmakers on both sides of the aisle have heaped criticism on Paulson’s handling of the program, particularly as he shifted from the original intention of purchasing troubled assets to later using the money chiefly to buy equity stakes in banks.

Congress could choose to add new restrictions on how the rest of the TARP funds are spent.

Democratic lawmakers have discussed efforts requiring the Treasury Department to use some of the money to reduce foreclosures and support a program to modify existing mortgages.
The first $350 billion has been committed already to a range of banks, financial institutions and the automakers, but not all of the money has actually been spent. The money for GM and GMAC will come from this allocated yet unspent pool of money.

WASHINGTON (UPI) — New rules for U.S. credit card companies to be released soon are a step forward for consumers, who have lobbied hard for oversight, industry analysts say.

The U.S. Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration was to announce new guidelines Thursday, The Washington Post reported.

Proposals released in May, included prohibiting banks from raising interest rates until late payments were at least 30 days overdue and barring banks from slapping on late fees too quickly. Proposals also included applying payments to balances with higher rates of interest before others, the Post said.

“When companies sharply increase interest rates, that could have a devastating effect on the financial stability of credit card holders,” Travis Plunkett of the Consumer Federation of America told the Post.

The strategy has changed from educating consumers to dictating rules for the industry.

“Eighteen months ago the Fed was focused on disclosure and transparency, and now they’re coming out with a prescriptive, rules-based guidance. It’s a whole different world,” said Brian Gardner at investment bank Keefe, Bruyette & Woods.

————————————————–

INDIANAPOLIS (UPI) — U.S. ethanol producers in the Midwest are struggling financially amid falling prices and tightening credit markets, analysts say.

The Indianapolis Star reported Sunday that many ethanol producers have experienced dwindling profits, and some have been forced into bankruptcy.

Most recently, Aventine Renewable Energy Holdings said last week it would slow construction of a plant in Mount Vernon, Ind., and delay the opening for about nine months.

The plant, designed to produce 220 million gallons of ethanol a year, had been scheduled to open early next year. The newspaper also reported the company plans to suspend construction at a plant in Aurora, Neb.

“The margins in the ethanol business today are not very good. They are near break-even,” said company spokesman Les Nelson. “We need to make sure we have liquidity in our business.”

Some observers say the ethanol industry is suffering from overbuilding and a sudden downturn in the markets and a souring economy.

“I think there certainly was excessive optimism,” said Chris Hurt, an agricultural economist at Purdue University. “There was a lot of talk and a lot of interest. But the vast majority of those projects did not go ahead.”

Barack Obama has noted, carefully and correctly, that we have only one president at a time. Yet on at least one issue he has taken the lead and nudged the man who will soon be his predecessor in a direction that he might not have taken without prompting.

It is an issue, moreover, that points up the tension between Obama’s appeal to young voters and his calls for creating a new America on the one hand and, on the other, policies that he backs which seem designed to freeze in place the America we have.

The issue is whether the federal government should bail out, with a capital injection the size of what would have been unthinkable four months ago, General Motors and perhaps the other two U.S.-based auto manufacturers, Ford and Chrysler.

As one born and raised in Detroit and its suburbs, who once lived next door to Big Three factory workers and later went to school with the children of Big Three executives, I have mixed feelings about this proposal. My native Michigan is ailing, with the highest unemployment in the nation, plummeting housing values and cascading foreclosures. Its economy, despite the efforts of two previous governors — Democrat Jim Blanchard and Republican John Engler — is dangerously dependent on what used to be called the Big Three and are now called the Detroit Three.

The bankruptcy of one or more of them would deeply impact the personal lives and dash the seemingly reasonable expectations of those who, directly or indirectly, have depended on them. I can’t help but think of these people when the issue is raised.

And yet the implications of a bailout are frightening. The Detroit Three were unprofitable well before the current financial crisis hit, and GM is reportedly hemorrhaging $1 billion a month. The huge cost of lavish employee and retiree health care benefits, negotiated with the United Auto Workers (UAW), makes it impossible for the companies to sell for a profit anything but the big cars and SUVs that, after gas prices hit $4 a gallon last spring, almost no one wants to buy.

No one in the private sector is willing to pony up a dime for this business plan. GM stock is below its 1946 price, and one investment house has priced it at zero.

The Detroit Three are taking advantage of the passage of the $700 billion financial bailout to argue that they, too, need government money to go on. But as Megan McArdle of The Atlantic argues, the finance firms are different. If credit coagulates, everyone suffers, while if the Detroit Three go bankrupt, their shareholders lose their stake, employee and retiree pay and benefits are cut, and real estate values go down in areas where the companies and their suppliers operate — but life for most of us goes on.

McArdle, native of a similarly bedraggled industrial area (Upstate New York) and an Obama supporter, further argues that the capital invested in keeping the hulk of the Detroit Three operating pretty much as they are, unprofitably, will not be available to those whose startups could morph into the Microsofts and FedExes of the future. We don’t know who today’s Bill Gateses and Fred Smiths are, but markets sure have a better chance of finding them than the federal government.

Obama’s presidential campaign was an entrepreneurial enterprise whose success owed much to harnessing individual initiative through an innovative management structure and creatively using emerging technology. The campaign, as well as the candidate, helped inspire under-30 voters, who preferred Obama by an unprecedented 66 percent to 32 percent margin — as opposed to his 50 percent to 49 percent margin in those 30 and over.

But keeping the Detroit Three in their present form, with their extravagant health care benefits and the union’s 5,000 pages of work rules, is an exercise in preserving in amber the America of the past.

And of course the Detroit Three will not be the last flagging enterprises to line up for government subsidy. Michigan is not the only state that has a talented congressional delegation capable of enlisting allies on relevant committees and from states with economic stakes in failing companies. Other unions, noting the UAW’s success in maintaining benefits, will be standing in line.

George W. Bush may well acquiesce in a Detroit Three bailout. GM could run out of cash over Christmastime (Big Three plants don’t operate between Christmas and New Year’s), well before Jan. 20. If so, I will feel happy for the respite provided my friends and relatives in Michigan. But I will wonder if in preserving the past we are giving up the chance to get to a better future.