Disability Treaty – Ratification - Vote Rejected (61-38, 1 Not Voting)
Despite a last-minute appearance by former GOP Senate Majority Leader Bob Dole of Kansas in support of the treaty, Senate Republicans mustered enough opposition to defeat the Convention on the Rights of Persons with Disabilities. Supporters, including Dole and Foreign Relations Chairman John Kerry, D-Mass., described the treaty as essentially enshrining the Americans with Disabilities Act (PL 101-336) as an international standard. Kerry highlighted the treaty’s support among veterans groups. The treaty’s detractors, including Republican presidential candidate and former senator Rick Santorum of Pennsylvania, raised the possibility of “international bureaucrats” making child-care decisions in place of parents, including potentially restricting home schooling. All international treaties require a two-thirds majority of those present and voting, so supporters fell five votes short. Majority Leader Harry Reid of Nevada vowed another vote in the next Congress.
Sen. Richard Burr voted NO Sen. Kay Hagan voted YES
Defense Authorization – Final Passage - Vote Passed (98-0, 2 Not Voting)
Following a Monday cloture vote, last week the Senate gave unanimous support to its FY 2013 defense authorization bill. The measure provides funding for all branches of the armed services (excluding the Coast Guard), nuclear security operations at the Department of Energy, and “overseas contingency operations,” i.e., funding for the war in Afghanistan and other overseas conflicts. Fiscal 2013 funding in the bill would come to roughly $631 billion, $88 billion of which covers war costs. Major amendments adopted during debate would further toughen sanctions against Iran; clarify that U.S. citizens and permanent residents may not be detained without charge or trial if apprehended on American soil; prohibit transfer of detainees from Guantanamo Bay to a U.S. facility; and ensure that the Pentagon is able to purchase alternative fuels. The provision on alternative fuels is likely to be a sticking point in conference negotiations with the House, whose bill prohibits purchase of such fuels if they are more expensive than traditional options such as petroleum. Despite President Obama’s veto message, both chambers’ bills contain restrictions on Guantanamo detainee transfers, retirement of Air National Guard planes, and TRICARE enrollment fees. Though conferees have not been named for either side (that is likely to happen this week), staff discussions have already begun.
Sen. Richard Burr voted YES Sen. Kay Hagan voted YES
Russia/Moldova Trade Relations – Final Passage - Vote Passed (92-4, 4 Not Voting)
The Senate cleared the way for more open trade with the Russian Federation and the tiny Eastern European republic of Moldova last week with passage of a House measure that lifts 1970s-vintage restrictions on both countries. The move was necessitated by Russia’s accession to the World Trade Organization over the summer; had trade restrictions not been rescinded, the U.S. would have been vulnerable to retaliatory actions by the Russians. Moldova has been a WTO member since 2001 and appears simply to have hitched a ride on a moving legislative vehicle. Despite cheers from the business community for the free trade measure, the Russian government is deeply unhappy with accompanying language chiding its poor human rights record and sanctioning individuals associated with the imprisonment and death of lawyer Sergei Magnitsky. The bill is currently before the president and will likely be signed into law shortly.
Sen. Richard Burr voted YES Sen. Kay Hagan voted YES
Upcoming Vote
To temporarily extend the transaction account guarantee program, and for other purposes. - S.3637
The Senate is scheduled to hold a cloture vote on the motion to proceed to a bill that would extend the Transaction Account Guarantee (TAG) program through the end of 2014. TAG is a program administered by the FDIC that provides full deposit insurance coverage for noninterest-bearing transaction accounts. The program was created in the midst of the financial crisis in late 2008 and later extended for two years in late 2010. It is set to expire at the end of this year, however, and lobbyists for small and independent banks are making a heavy push to extend the program again. Republicans are wary of keeping it alive, so invoking cloture is no guarantee.
Showing posts with label FDIC. Show all posts
Showing posts with label FDIC. Show all posts
Tuesday, December 11, 2012
Tuesday, September 7, 2010
Campaign for Liberty
Reality Economics, By Lew Rockwell
September 7, 2010
As a culture, we like our reality on television, but seem to oppose it in economics.
For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing with spillover effects on the rest of economic life.
That bubble had to explode to restore some sanity to the economic environment. There is no getting around that. The policies were all about trying to paper over what we did not want to deal with as facts. But the facts won't go away.
Do we have to make a television show to get Washington to see it?
The FDIC has admitted that some 829 banks remain at risk of failure. That's one in ten. Only 118 have failed this year but many more should have and would have absent Fed intervention. Meanwhile, there are no new banks started in the U.S. in the last quarter -- the first time in 38 years that this has been true. As for the actual soundness of the banks, it's anyone's guess. How much bad debt they are carrying, with both lenders and borrowers agreeing to look the other way, is something that no one wants to know.
Then there is the other topic that no one wants to talk about: house prices. They need to fall more. Washington has attempted to prop them up with some 18 different programs from mortgage buyouts to tax schemes. It delayed the fall of prices for a time. But they have begun to fall again, exactly to the point where nature wants to take them.
The problem is that you can't artificially boost both supply and demand at the same time. If you subsidize housing construction and that results in more houses being built, you apply downward pressure on the prices of houses that are currently on the market. If you subsidize house buying, you also promote house selling, allowing the reality of the real estate glut to express itself in home prices.
There is no way that the central planners can get around this problem unless they both build and buy houses themselves and leave the rest of us out of it. That might help prettify the housing data but it does nothing to change market realities. Merrill Lynch, in fact, has published a report that suggests that the housing glut will not normalize for another five years and that assumes some reasonable slowdown in the pace of building.
Already the government has done everything in its power to override market signals, at the same time it is attempting to make market signals operate in a way that conforms to political priorities. The problem is that you can't do both. You have to either defer to the market or abolish it.
The same is true with unemployment rates, which are stubbornly high. Now, what does it tell you when there is a surplus of workers relative to the number of job opportunities? It means that in some sectors, jobs are selling at too high a price. There are fixes for this. You can lower the minimum wage, reducing the cost of hiring, or workers can lower their reservation wage.
As it stands, Washington is doing nothing to encourage any of these fixes, so of course unemployment remains very high. Many young people have actually removed themselves from the market by going back to school to avoid paying their student loans. The state universities are glad to take their money.
A good indicator of future business conditions is commercial and industrial loans. They continue to fall as if off a cliff. How does the Fed deal with this? By keeping rates as low as possible on the short end, so that way banks have nothing to gain by lending and consumers have nothing to gain by saving. Not smart.
Meanwhile long-term rates are being held down by the existence of a too-big-to-fail doctrine for mortgage-holding companies like the nationalized Freddie Mac and Fannie Mae. In a real market, there is no telling where rates would be, but they would be high enough to compensate for risk. When there is no risk, or that risk is socialized, you see the absurd scenario of falling rates during the largest mortgage crisis in American history.
A major difference between now and the 1930s relates to the standard of living of consumers themselves. Everyone is still shopping, still living high on the hog, still going out to eat, still spending lavishly. But how and why? The answer is consumer credit, which is down but not nearly in proportion to the fall in economic prospects.
Such opportunities didn't exist in the 1930s. People had to live within their means. Today we can all just go on fooling ourselves for as long as possible.
Do we even want to raise the ghastly subject of government finance? Let's not go there.
Suffice it to say that the entire system today is shot through with artifice that just can't last. What are we to do about it? The present course is going to drive us further and further into disaster. The only real answer was stated by Ludwig von Mises in 1931, in an essay in the book The Causes of the Economic Crisis.
Mises wrote in 1931 as follows, and there is really nothing to add to his analysis:
"The severe convulsions of the economy are the inevitable result of policies which hamper market activity, the regulator of capitalistic production. If everything possible is done to prevent the market from fulfilling its function of bringing supply and demand into balance, it should come as no surprise that a serious disproportionality between supply and demand persists, that commodities remain unsold, factories stand idle, many millions are unemployed, destitution and misery are growing and that finally, in the wake of all these, destructive radicalism is rampant in politics.
"The periodically returning crises of cyclical changes in business conditions are the effect of attempts, undertaken repeatedly, to underbid the interest rates which develop on the unhampered market. These attempts to underbid unhampered market interest rates are made through the intervention of banking policy -- by credit expansion through the additional creation of uncovered notes and checking deposits -- in order to bring about a boom.
"The crisis under which we are now suffering is of this type, too. However, it goes beyond the typical business cycle depression, not only in scale but also in character -- because the interventions with market processes which evoked the crisis were not limited only to influencing the rate of interest. The interventions have directly affected wage rates and commodity prices, too....
"All attempts to emerge from the crisis by new interventionist measures are completely misguided. There is only one way out of the crisis: Forgo every attempt to prevent the impact of market prices on production. Give up the pursuit of policies which seek to establish interest rates, wage rates and commodity prices different from those the market indicates. This may contradict the prevailing view. It certainly is not popular. Today all governments and political parties have full confidence in interventionism and it is not likely that they will abandon their program. However, it is perhaps not too optimistic to assume that those governments and parties whose policies have led to this crisis will some day disappear from the stage and make way for men whose economic program leads, not to destruction and chaos, but to economic development and progress."
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
September 7, 2010
As a culture, we like our reality on television, but seem to oppose it in economics.
For more than two years now, and even longer depending on your dating scheme, the federal government has waged war on the reality of the incredible Fed-fueled bubble that developed in housing with spillover effects on the rest of economic life.
That bubble had to explode to restore some sanity to the economic environment. There is no getting around that. The policies were all about trying to paper over what we did not want to deal with as facts. But the facts won't go away.
Do we have to make a television show to get Washington to see it?
The FDIC has admitted that some 829 banks remain at risk of failure. That's one in ten. Only 118 have failed this year but many more should have and would have absent Fed intervention. Meanwhile, there are no new banks started in the U.S. in the last quarter -- the first time in 38 years that this has been true. As for the actual soundness of the banks, it's anyone's guess. How much bad debt they are carrying, with both lenders and borrowers agreeing to look the other way, is something that no one wants to know.
Then there is the other topic that no one wants to talk about: house prices. They need to fall more. Washington has attempted to prop them up with some 18 different programs from mortgage buyouts to tax schemes. It delayed the fall of prices for a time. But they have begun to fall again, exactly to the point where nature wants to take them.
The problem is that you can't artificially boost both supply and demand at the same time. If you subsidize housing construction and that results in more houses being built, you apply downward pressure on the prices of houses that are currently on the market. If you subsidize house buying, you also promote house selling, allowing the reality of the real estate glut to express itself in home prices.
There is no way that the central planners can get around this problem unless they both build and buy houses themselves and leave the rest of us out of it. That might help prettify the housing data but it does nothing to change market realities. Merrill Lynch, in fact, has published a report that suggests that the housing glut will not normalize for another five years and that assumes some reasonable slowdown in the pace of building.
Already the government has done everything in its power to override market signals, at the same time it is attempting to make market signals operate in a way that conforms to political priorities. The problem is that you can't do both. You have to either defer to the market or abolish it.
The same is true with unemployment rates, which are stubbornly high. Now, what does it tell you when there is a surplus of workers relative to the number of job opportunities? It means that in some sectors, jobs are selling at too high a price. There are fixes for this. You can lower the minimum wage, reducing the cost of hiring, or workers can lower their reservation wage.
As it stands, Washington is doing nothing to encourage any of these fixes, so of course unemployment remains very high. Many young people have actually removed themselves from the market by going back to school to avoid paying their student loans. The state universities are glad to take their money.
A good indicator of future business conditions is commercial and industrial loans. They continue to fall as if off a cliff. How does the Fed deal with this? By keeping rates as low as possible on the short end, so that way banks have nothing to gain by lending and consumers have nothing to gain by saving. Not smart.
Meanwhile long-term rates are being held down by the existence of a too-big-to-fail doctrine for mortgage-holding companies like the nationalized Freddie Mac and Fannie Mae. In a real market, there is no telling where rates would be, but they would be high enough to compensate for risk. When there is no risk, or that risk is socialized, you see the absurd scenario of falling rates during the largest mortgage crisis in American history.
A major difference between now and the 1930s relates to the standard of living of consumers themselves. Everyone is still shopping, still living high on the hog, still going out to eat, still spending lavishly. But how and why? The answer is consumer credit, which is down but not nearly in proportion to the fall in economic prospects.
Such opportunities didn't exist in the 1930s. People had to live within their means. Today we can all just go on fooling ourselves for as long as possible.
Do we even want to raise the ghastly subject of government finance? Let's not go there.
Suffice it to say that the entire system today is shot through with artifice that just can't last. What are we to do about it? The present course is going to drive us further and further into disaster. The only real answer was stated by Ludwig von Mises in 1931, in an essay in the book The Causes of the Economic Crisis.
Mises wrote in 1931 as follows, and there is really nothing to add to his analysis:
"The severe convulsions of the economy are the inevitable result of policies which hamper market activity, the regulator of capitalistic production. If everything possible is done to prevent the market from fulfilling its function of bringing supply and demand into balance, it should come as no surprise that a serious disproportionality between supply and demand persists, that commodities remain unsold, factories stand idle, many millions are unemployed, destitution and misery are growing and that finally, in the wake of all these, destructive radicalism is rampant in politics.
"The periodically returning crises of cyclical changes in business conditions are the effect of attempts, undertaken repeatedly, to underbid the interest rates which develop on the unhampered market. These attempts to underbid unhampered market interest rates are made through the intervention of banking policy -- by credit expansion through the additional creation of uncovered notes and checking deposits -- in order to bring about a boom.
"The crisis under which we are now suffering is of this type, too. However, it goes beyond the typical business cycle depression, not only in scale but also in character -- because the interventions with market processes which evoked the crisis were not limited only to influencing the rate of interest. The interventions have directly affected wage rates and commodity prices, too....
"All attempts to emerge from the crisis by new interventionist measures are completely misguided. There is only one way out of the crisis: Forgo every attempt to prevent the impact of market prices on production. Give up the pursuit of policies which seek to establish interest rates, wage rates and commodity prices different from those the market indicates. This may contradict the prevailing view. It certainly is not popular. Today all governments and political parties have full confidence in interventionism and it is not likely that they will abandon their program. However, it is perhaps not too optimistic to assume that those governments and parties whose policies have led to this crisis will some day disappear from the stage and make way for men whose economic program leads, not to destruction and chaos, but to economic development and progress."
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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