Posts Tagged ‘stimulus’

MSMDC Reviews Audacity

Tuesday, April 27th, 2010

This is from MSMDCNews.com:

President Obama has taken quick and decisive action to enact an economic stimulous package strong enough to address problems of historic proportions. What does this new package mean for American families, businesses, investors, and taxpayers? The Audacity of Help unrolls the blueprints and looks at how the packages passed by Congress and signed into law by President Obama will affect healthcare, education, the environment, energy, taxes, and more. The book includes analysis of sectors and industries that will benefit, as well as those that will not. Wasik’s conclusions are firmly grounded in a comprehensive and enlightening analysis of the final package. Extensive study and interviews with experts from each economic sector support his analysis.

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Obama’s Utopian Economics

Wednesday, December 30th, 2009

This blog post cites Audacity:

Since the start of the finical crisis, banks and insurance companies have been begging for government bailouts. Does the U.S government have the money to save them? No. Now the need is for money from the working-class taxpayers to stay alive.

Along side all this is the fact that middle class America may not be able to survive this kind of finical pressure. What the “American dream” consists of is credit cards and monthly payments. People live large but can’t even afford it. With new high taxation coming from the Obama administration to pay for all the debt, people still spend as if there was no increase taxation. The Economist magazine wrote in May 2009, “Having spent a fortune bailing out their banks, Western governments will have to pay a price in terms of higher taxes to meet the interest on that debt. In the case of countries (like Britain and America) that have trade as well as budget deficits, those higher taxes will be needed to meet the claims of foreign creditors. Given the political implications of such austerity, the temptation will be to default by stealth, by letting their currencies depreciate. Investors are increasingly alive to this danger”.

Wall street has come back according to Nomi Prins, former investment banker turned journalist, who worked at Goldman Sachs. Prins wrote a book called, Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street. Her book points out that the current crisis did not happen because ordinary citizens were able to borrow money or put money they could not pay back on their credit cards, for example, but because Wall Street converted loans into assets that allowed it to borrow much more than it could afford. Prins does not stop there. In an article called Obama Banking Too Much On Banks, she looks at the problems of Obama’s economic plan and says, “Obama’s reforms do not strike deeply enough”. The article shows that Wall Street has been able to come back but is that enough? No. Prins told Amy Goodman of democracynow.org in an interview that, “Obama is making the grave error of mistaking the health of Wall Street for the health of the American economy.”

Obama said a lot while campaigning for office. He talked about change and hope. But how does that change and hope play out for the people that voted and stood by him, mostly students and youth? On the subject of Obama’s promise to make college affordable, John F. Wasik said in his new book, The Audacity of Help: Obama’s Economic Plan and the Remaking of America, “While Obama proposed an American opportunity tax credit of $4,000 toward free college education, Congress actually adopted that name for the former Hope Scholarship, offering only as much as $2,500/year, just through 2010. Eligibility stipulations include an income limit. Congress also did nothing to simplify the cumbersome financial aid process, which Obama promised to eliminate.”

On a similar note, the United States faces a Zimbabwe-style economic collapse, says South Carolina Governor Mark Sanford. Sanford has compared Zimbabwe’s economic collapse to what is happening to America today. He has said Zimbabwe attempted to stimulate the economy by printing money, exactly what Obama is doing. Zimbabwe even created a $100 trillion bill. The governor has compared America to Zimbabwe’s 11 million percent inflation rate which might be a bit extreme, but in reality, the U.S is going down a hard road if Obama keeps printing and spending money that does not in reality exist. Sanford has said, “What you’re doing is buying into the notion that if we just print some more money that we don’t have and send it to different states, we’ll create jobs,” he then said. “If that’s the case, why isn’t Zimbabwe a rich place?”

Another issue on this topic of the financial crisis is China. China has the U.S in an economic headlock. As a world power, gaining almost all control, China has bought more than 1 trillion dollars of American debt. Barack Obama himself has predicted the possibility of trillion-dollar deficits as he said “for years to come,” which basically means Obama will be taking it in the rear from his counterpart Hu Jintao. Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers. China in the last five years has spent as much as one-seventh of its entire economic output buying foreign debt, mostly American which primarily was to finance the wars in Iraq and Afghanistan. Economists have said that huge deficits have raised worries about the enthusiasm of foreigners like China to keep purchasing US Treasury debt. This fret alone has contributed to recent falls in the value of the US dollar.

The United Nations (U.N.) view of the dollar is that it should be replaced with a global currency. The U.N. has planned the largest service of the world’s monetary system since World War two In are port by the The United Nations Conference on Trade and Development (UNCTAD). China is on bored with replacing the dollar as the world’s reserve currency since they know they will not be effected especially since China now has America in an economic headlock because of it’s trillions of dollars in debt. Detlef Kotte, one of the report’s authors, said “Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability”. But on the other end of that the deficit nations such as the UK and US would have to take the main burden of adjustment . Of course economists have yet to come up with another alternative and even major institutions, including the G20, are at a loss for ideas. Unfortunately, no one else has come up with another substitute. So now we wait and watch history be made.

Sources:

Economist Magazine-A New Global System is Coming Into Existence

Nomi Prins, It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street, Publisher: Wiley (September 22, 2009 http://www.amazon.com/Takes-Pillage-Bailouts-Backroom-Washington/dp/0470529598

Motherjones.com, Nomi Prins, Obama Banking Too Much On Banks, Mon Sep. 14, 2009 http://motherjones.com/politics/2009/09/obama-banking-too-much-banks

Democracynow.org, September 15, 2009
http://www.democracynow.org/2009/9/15/nomi_prins_obama_banking_too_much

John F. Wasik, The Audacity of Help: Obama’s Economic Plan and the Remaking of America, Publisher: Bloomberg Press; Original edition (August 26, 2009)
http://www.amazon.com/Audacity-Help-Economic-Remaking-America/dp/1576603563

johnQIII

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Audacity Reviewed by California Bookwatch

Tuesday, December 29th, 2009

This is from California Bookwatch:

THE AUDACITY OF HELP covers the basics of what the new president has promised and how Congress is thwarting his plans, offering chapters clear on ‘what Congress passed’ and ‘who benefits most’ on all Obama’s issues. Obama wants more shared responsibility on all levels–something Congress isn’t willing to allow. His success or lack thereof reflects how much Americans really wish change, and is analyzed in The Audacity of Help.

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The $1.5 Trillion “Fix-Up” Gap

Thursday, October 8th, 2009

This is a piece I did for Huffington Post on the $1.5 trillion need to to fix U.S. infrastructure:

Let’s face it. America is one giant fix-up project. Bridges are crumbling. Public transportation systems are rusting. Water mains are leaking. Getting everything repaired and modernized is perhaps the largest and most expensive“honey do” list imaginable.

As I discovered in researching my new book Audacity of Help: Obama’s Economic Plan and the Remaking of America (www.audacityofhelp.net), there’s a $ gap between what was committed in the American Recovery and Reinvestment Act and what needs to be done.

While it’s undeniable that the stimulus funds are slowly trickling into communities and creating jobs - although not enough to offset the employment lost in the past year - the actual amount of money needed is far short of what’s needed. The infrastructure repair bill is estimated to be more than $1.6 trillion, according to the American Society of Civil Engineers, which published a report card on infrastructure conditions a few weeks after Obama took office. So the stimulus plan comes up about $1.5 trillion short.

What about all of those annoying barricades you see everywhere for road construction? Crumbling or inadequate roads cost American motorists some $67 billion a year or $710 per motorist - that’s just to fix the highways and bridges. We collectively lose the equivalent of 4.2 billion hours just sitting in traffic, costing the economy about $78 billion a year in terms of lost working hours (not to mention lost family time).

Are you a conscious commuter and take public transportation? Federal spending on public transportation systems lags the amount needed by about $6 billion annually. That makes the highway repair number loom even larger since nearly half of Americans don’t have access to public transportation.

You don’t need to go far to notice that America’s skeleton has some major osteoporosis. New York’s water tunnels are leaking millions of gallons of precious water. Los Angeles can never seem to get enough of this elixir of life. Chicago’s ancient “el” elevated-rail system is rusting away. Just miles from the White House, suburban Maryland’s 5,500-mile system of water pipes sprang a few leaks - more than 4,000 over the past two years (252 leaks were reported just a few days before the inauguration). Nearly every municipality has something that needs to be fixed or updated.

The Obama Administration’s stimulus plan set aside about $100 billion for infrastructure improvements. Of the $48 billion for all transportation projects, $27 billion of that has been allocated to the US Department of Transportation for mostly road/highway improvements.
Here’s a more detailed breakdown:

*$30 Billion for electrical system improvements. This money would be divided between modernizing and creating a “smart” grid, advanced battery technology and energy-department grants.

*$29 Billion for Public Works. This covers everything from street repairs to bridge reconstruction.

*$18 Billion. More funding for public works that will cover toxic waste clean-up, municipal water systems and flood prevention.

*$8.4 Billion for Public Transit. Sorely needed by cities, this will help repair and upgrade public transportation systems.

*$8 Billion for High-Speed Rail. This was a long-sought downpayment on creating intra-state systems to reduce the reliance on air travel.

One glaring subject that Obama avoided in the campaign and early days of his presidency is how to pay for infrastructure over time and how it will dovetail with an overall strategy to address climate change. While conservative Democrats and Republications generally object to increasing the federal deficit, they also oppose taxes. Unless huge cuts are made to other large budget items - unlikely during a recession - the Treasury will need to sell more notes to pay for the new spending, most likely to the Chinese, Japanese and Europeans.

At a certain point, investors in our debt may decide that the paltry after-inflation returns outweigh the political benefits. No one knows when that day will come, but it will happen and may shut down the debt-financing juggernaut that’s keeping the world’s largest economy afloat.

There may be no way of getting around the fact that gasoline taxes (or carbon-based levies on fuel, vehicles or buildings) need to be added or raised. The 18.4-cent levy on gasoline on 24.3-cent surtax on diesel fuel has been unchanged since 1993. That brought in about $39 billion in 2007. The CBO projects an economically justifiable investment of $132 billion in highways alone. Filling this funding gap will have to involve some sacrifice and extra dollars from those using the roadways. A $44 billion kitty could be created annually by boosting the fuel tax by 25 cents a gallon. The money has to come from somewhere. Plunging the nation ever further into debt and saddling future generations with it just isn’t sustainable.

A national infrastructure bank or trust fund, as proposed in the 2011 budget, could become a permanent institution overseen by trustees who are independent of Congress. This entity, if managed prudently and free of political earmarking, might be able to avoid the pork-barrel process of awarding federal dollars to the well-heeled few. Until then, the first wave of federal dollars may be a short-term boost, but won’t address the long-term aging of the nation’s backbone.

Author Bio
John F. Wasik, author of The Audacity of Help: Obama’s Economic Plan and the Remaking of America, is the author of twelve books, including The Cul-de-Sac Syndrome and The Merchant of Power. He speaks widely and writes a weekly Bloomberg News column that reaches readers of five continents and which earned him the 2009 Peter Lisagor award for journalism. He lives in Chicago.

For more information please visit www.audacityofhelp.net

Read more at: http://www.huffingtonpost.com/john-f-wasik/closing-the-15-trillion-f_b_314026.html

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Obama Stimulus Makes Green Remodeling Pay Big Time

Thursday, October 1st, 2009

This is my 10/1/09 Bloomberg column:

Homeowners Get Easy Money From Green Renovations

Commentary by John F. Wasik

Oct. 1 (Bloomberg) — Can you profit from being an eco- investor?

There are really only two ways of doing it now. You can buy a risky sector fund or stock and hold on to it for dear life over the next few years. Or you can invest in your home.

Of the two, I prefer a home investment because the incentives have never been better and there’s no market risk. All the green funds got creamed last year.

Yet it’s unlikely your broker will tell you about the multiple tax breaks available through state and federal governments. Nor will he mention that eco-improvements will lower your cost of living.

If you do this right, not only will you be cutting your energy costs and greenhouse gases, but you can realize immediate savings in energy costs. Solar panels, for example, will save you money every year and have a steady rate of return that’s almost guaranteed, depending on the state incentives.

As part of the U.S. stimulus plan, also known as the American Recovery and Reinvestment Act, there are a raft of generous tax breaks for everything from replacing doors to installing geothermal heating systems.

Whether you are contemplating a complete makeover or just replacing a furnace, you have until the end of next year to put in service a number of improvements to qualify for the federal tax credits.

What You Can Do

Fixing up your home has never made so much economic sense. Uncle Sam is subsidizing lots of green remodeling this year.

The Treasury will give you a tax credit of 30 percent of the cost (a maximum of $1,500) for energy-efficient windows, doors, insulation, conventional heating/cooling systems, water heaters and biomass stoves.

As with any tax break, only certain types of improvements qualify, although this is the most generous range of incentives in recent memory. See www.energystar.gov/taxcredits for specifics. Even if you rent or own a condo, apartment or co-op, you can save on energy costs by buying Energy Star appliances.

Even better credits are available on geothermal heat pumps, solar panels/heaters, small wind energy systems and fuel cells. There’s no limit on the 30 percent write-off for these items through 2016.

So if you purchase a $20,000 solar-electric system, you can get federal credit for $6,000 that will knock the price down to $14,000. And that’s before state tax breaks apply, so this is not your final price.

Although state programs vary, there are additional incentives for installation and actual purchase of the clean power you generate.

Figuring a Payback

When doing the numbers on your home-improvement project, you will need to see what your state is offering you to go green and make a few assumptions.

Let’s say you want to install a 5,000-kilowatt solar electric system on a full-sun, south-facing roof in New Jersey, which has a generous alternative energy program. The retail price is $38,000, but after a state rebate of $8,750 and $8,775 federal credit, your net price is $20,475.

Since the state will compensate you for the solar power you generate, you will receive renewable energy credits once you produce at least 1,000 kilowatt hours of electricity.

According to a payback analysis at www.thesolarcenter.com, you will receive $2,750 in annual state energy credits while paring about $1,000 in electricity costs for a saving of $3,845.

Know Your Energy

If power rates drop, then the payback will be less generous. One reasonable prediction, though, is that climate- change legislation will penalize fossil-fuel power producers and force their rates higher, so it also pays to know if your electricity is generated by nuclear, coal, gas or hydroelectric.

Another consideration is the cost of solar equipment, which has been dropping, so that may also shorten your payback time.

No matter which course you choose, I’m generally optimistic about the future of investing in what I call eco-tech, a category that includes clean power, energy efficiency, green buildings, biofuels and nanotechnology.

As the nation’s largest venture-capital entity, the Obama administration has provided more than $37 billion in seed money for numerous projects in alternative energy, clean fuels and electric vehicles through the stimulus plan. That means the cost of these products will come down as they are mass-produced.

Few would dispute that eco-tech will gain even more traction as the United Nations Climate Conference convenes in December and carbon-trading exchanges are established.

No matter which eco-technologies win out, one concept won’t change: If you have a chance to reduce your living costs, why not do it now?

Global climate-change solutions will require time, capital and mass political acceptance. Paybacks on your home improvements will materialize at a much less glacial pace.

(John F. Wasik, author of “The Audacity of Help: Obama’s Economic Plan and the Remaking of America,” is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John F. Wasik in Chicago at jwasik@bloomberg.net.

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“The Most In-Depth Presentation”

Friday, September 4th, 2009

This is a review from www.historycentral.com on “Audacity:”

Reviewed by Marc Schulman
The Audacity of Help by John Wasik

This new book by John Wasik demonstrates both the power and danger of of an instant book. By coincidence last week as I was reading the book my ten-year-old son asked me if there were any new books out on President Obama since he has become President. I was able to show him this book, the unspoken- yes books can be relevant, and everything is not on the web. The books subtitle is Obama’ s Economic Plan and the Remaking of American Who wins, who loses in health care, education and energy.

Wasik presents a largely sympathetic view of the action of the Obama administration and its plans for the future. He presents a succinct history of the economic crisis, laying bare the various stages that brought about the crisis. He then goes through point-by-point the initial actions of the Obama administration as reflected by the stimulus package and the budget that was approved. The author does a good job of presenting the campaign promises of Obama, them comparing them with the bills that have emerged from Congress. By doing so he presents the most in-depth presentation I have read on the details of the stimulus package and the subsequent budget bill.

Full review at http://www.historycentral.com/BookReviews/Audacity.html

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What’s Behind Obama’s Economic Plan

Tuesday, September 1st, 2009

This is an excerpt from “Audacity of Help” that ran on Huffington Post and elsewhere:

Like FDR, Obama proposed a lofty agenda that will concentrate on creating employment and eventually economic security for working Americans. As a president who has a deep sense of history — it’s evident in his speeches, writing, and policy proposals — Obama stated in his Audacity of Hope that “today, the social compact that FDR helped construct is beginning to crumble.” Obama was distressed that job, retirement, and health security had been dismantled because the painful excesses of free-market policies wouldn’t protect the country in a global economy. European, Japanese, and Canadian workers don’t have to worry about their pensions or health care. In a global marketplace, Americans simply can’t compete with countries that have a better social safety net.

“If the guiding philosophy behind the traditional system of social insurance could be described as ‘We’re all in it together,’” he continues in Audacity, “the philosophy behind the Ownership Society seems to be ‘You’re on your own.’”

What had been sold as a panacea during the 1990s and the first decade of the twenty-first century, the market economy, blew up with the triple explosions of the dot-com, housing, and credit bubbles. Wall Street and bankers sold the myth that stocks and homes were guaranteed ways to wealth. Over the past thirty years, they convinced employers to dump hundreds of thousands of guaranteed, defined-benefit retirement plans for 401(k)-like plans, which subjected employees to unchecked market risk.

Homeowners wanting to participate in the American Dream by building home equity succumbed to the promise that adjustable-rate mortgages — which actually subjected them to the perils of credit markets — would create solid nest eggs. Entrepreneurs and, increasingly, corporate employees were hawked the idea of fending for themselves for health insurance, where they were effectively punished in the form of unaffordable rates for any preexisting conditions. Such was the big lie of the ownership society. It was the obverse of the New Deal philosophy. It was a raw deal.

Coupled with the myth that ordinary consumers could somehow make rational, informed decisions in an unpoliced market economy was the Nero-like fallacy during the Bush years that nothing was wrong with our energy infrastructure or climate. The surge in oil (to $147 a barrel) and gasoline ($4-plus per gallon) prices in the middle of 2008 showed how utterly senseless this policy had been. The popularity of former Vice President Al Gore’s An Inconvenient Truth, which won him both an Academy Award (for the movie version of his book) and a Nobel Prize for Peace, illuminated the folly of the Bush regime’s anti-environment policies. Hurricanes, cyclones, and precipitation cycles have become more intense. Drought and forest and wildfires ravage densely populated regions, causing famine, dislocation, and war.

The Bush administration’s criminal inattention to the victims of Hurricane Katrina in 2005 was emblematic of his disconnect from human reality (New Orleans is still a shell of its former self). It was pathological neglect like this that spurred much of the Obama Green Deal. Obama links a need for a new social compact with employment, education, and environmental concerns.

If most of his programs survive the contentious legislative process, Obama will have succeeded in reviving social capitalism, a blend of humanistic service, pragmatic government supervision, and some free-market principles. Better yet, if his initiatives excel in launching private-sector investments — and broad-based employment from inner cities to Silicon Valley — in clean energy, infrastructure, broad-band expansion, and exportable technologies, he may even be seen as a social or compassionate capitalist.

The Green Deal is the spiritual heir of the New Deal, only much more focused on creating an economy specifically rebuilt for the twenty-first century. After all, FDR never believed capitalism was dead, he only sought to build new institutions and preserve old ones that failed because of an over reliance on unfettered market forces. Although a stern critic of market forces, Obama is attempting to frame humanistic economics in a different light: government can work to create a stronger private sector while creating jobs, educating everyone, rebuilding our infrastructure, addressing climate change, and helping the poor.

The above is an excerpt from the book The Audacity of Help: Obama’s Economic Plan and the Remaking of America by John F. Wasik. The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy.

Copyright © 2009 John F. Wasik, author of The Audacity of Help: Obama’s Economic Plan and the Remaking of America

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