A New Low for Bush-Paulson: Kiting Checks

The Treasury has already allocated all the $350 billion that Congress authorized for the first half of its bailout program, NYT reports. They have no money left. So how exactly is the Treasury going to fund its latest bailout, $ 6 billion to GMAC?

NYT again:

...even though the Treasury Department has not yet requested the second half of the money, officials said they could provide the financing to GMAC because they have not actually used all of the money allocated for recapitalizing banks.

As Henry Blodgett points out :

This sounds equivalent to writing $1,100 of checks on a checking account with $1,000 in it because only $900 of the checks have already been cashed. In the real world, this is called "check kiting," and it's illegal.

And, keep in mind, as Robert Reich detailed, this is all for Bush to save face and keep the Big Three from failing on his watch, so that the problem is passed on to Obama.

Check kiting to save face, this will really help GW with historians.

Robert Reich Breaksdown the Auto Bailout: Loopholes and All

RR is apparently trying to pull a GW and go out the year 2008 on a high note.

He has ditched his Keynesian propoganda campaign for at least one post, and puts together the best analysis of what's behind the George Bush auto bailout that I have come across. It's very much worth reading.

Robert Reich On Being Vetted

Robert Reich doesn't believe Sarah Palin was vetted the way he was. Reich, who served as Labor Secretary in the Clinton Administration, explains what his vetting process was like:

Having been through the process of “vetting” prospective cabinet members, I can tell you it’s time-consuming, detailed, and thorough. I’d like to think the vetting of a vice presidential nominee would be more so – especially one whose odds of becoming president, should she be elected, are somewhat higher than that of the normal vice president.

Sixteen years ago, Bill Clinton’s “vetting” team asked me and other prospective cabinet members for (1) our tax returns, going back at least five years, (2) our bank records, (3) a detailed listing of our assets, (4) the names and places of everywhere we had lived, and the names and phone numbers of neighbors whom they could call about us, (5) a description of every job we had ever had, every client we had ever served, and the names of employers and clients with whom they could check, (6) the names of our family members, their ages, their occupations (if any), (7) a description of any civil or criminal investigations or prosecutions in which we had been involved (8) and – perhaps most importantly – “anything we should ask you about, the answer to which might cause you or the administration any embarrassment.”

It didn’t stop there. Investigators checked our answers, interviewed our friends and neighbors and former employers, asked for more records if uncertain. Agents from the Federal Bureau of Investigation did their own background checks. Staff members of the relevant congressional committees, representing both parties, looked over the files and added questions of their own.

It didn’t even stop there. I recall two large, three-ring black binders containing passages from books and articles I had written that might prove troubling to some of the Senators. My vetting team suggested I be prepared to answer questions about them.

The process took well over a month, not including the Senate confirmation hearing. I don’t recall doing anything during that interval except responding to questions from the vetting team, the FBI, and oversight committee staffers, both Republican and Democrat.

Robert Reich on Freddie and Fannie

A thorough analysis by Robert Reich of the developing bailout of Freddie Mac and Fannie Mae, here.

Reich Is 2 for 2

Left-wing economist Robert Reich has written another semi-reasonable commentary. If he keeps this up, we may have to give him the Left Wing Economist Who Makes the Most Sense Award, for 2008.

In this episode, Reich explains why many who are laid off do not collect unemployment payments. He then explains how this scenario comes about because of changes in the structure of the labor market,a labor market that has changed dramatically over the years.

It's solid theoretical analytics by Rech. However, he does not provide any data backing up his very reasonable claim.

But, at this point we must part from Reich for other reasons. He who would like to see the entire structure of unemployment benefits changed so that those currently not receiving unemployment payments are included in a restructured unemployment program.

We, on the other hand, would simply like to see the entire unemployment program shut down.

Reich's full commentary is here.

Reich Rips McCain's Budget Plan

Robert Reich is drinking Obama Kool Aid so you have to be real careful with any analysis he puts out. However, Reich has done a superb job of uncovering the problem with John McCain's budget plan. The plan was released today.

As Reich points out, there's a lot of tax cutting. Tax cutting in our book is always a good thing. It is not for Reich. According to Reich, McCain promises $650 billion in tax cuts per year, over the next four years.Great. But the big problem in McCain's plan, and Reich nails it, is that unless there are huge spending cuts, the deficit is going to explode.

McCain says he wants the budget balanced by the end of a McCain first term. It's not going to happen. McCain will not make the necessary spending cuts. Therefore, tax cuts will turn out to be less than McCain is promising and the budget will be nowhere near balanced.

Reich's analysis is here.