Archive for the ‘Business’ Category

A good sign on one of the areas in which the GOP really must change

There’s a lot of talk about how Republicans need to re-brand themselves on social issues. I’m not convinced that’s more important for the GOP than shedding its image of being too closely aligned with Big Business.

There are three key ways in which Republicans lost credibility since 2000. One, as Peggy Noonan argued recently, was the 2003 Iraq invasion. Another was the increase in federal spending that took place during George W. Bush’s presidency; spending accelerated toward the end, when Democrats were in control of Congress, but it was rising too swiftly well before Nancy Pelosi became speaker of the House.

The third was the 2008 bailout of Wall Street. The party that supposedly champions free enterprise went along with using hundreds of billions of taxpayer dollars to save financial institutions that acted recklessly. Some Republicans argued then, and still argue now, that the alternative would have been worse. But the larger point is that the nexus of Big Business, …

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Corporate welfare alive and well in the Obama administration

Who is happiest with President Obama’s nominees to head the EPA (Gina McCarthy) and the Energy Department (Ernest Moniz)? As Tim Carney explains, it’s neither environmentalists on the left nor free marketeers on the right, but the lobby groups that seek as many beneficial — for their corporate members — government subsidies and mandates as possible:

Although Obama regularly talks about ending “corporate welfare,” battling the “special interests” and creating a “level playing field,” he has steadfastly supported government favors for the ethanol industry — favors that increase costs for drivers, taxpayers, ranchers and grocery shoppers.

The Solar Energy Industries Association also applauded Obama’s nomination of McCarthy and Moniz. Solar companies profit from a production tax credit that Obama recently fought to extend, and a plethora of stimulus subsidies such as loan guarantees, tax credits and grants.

Check who’s investing big in solar energy, and you’ll notice a lot of …

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Olens takes on another federal overreach: Dodd-Frank

In Washington, Congress passes and the president signs a vast expansion of federal power over a large and critical industry.

In corporate boardrooms, business executives believe that law usurps their rights. In state capitals, attorneys general believe it infringes on states’ sovereignty and puts them at great financial risk. The two groups come together and sue to overturn the law.

A recap of the Obamacare lawsuit decided by the U.S. Supreme Court last summer? Yes, but it’s also the lead-up to another legal battle stemming from Democrats’ dominance of Washington in 2009 and 2010.

Last month, Georgia joined a lawsuit seeking to overturn major portions of the Dodd-Frank financial reform law of 2010. The law’s stated intent was to avoid failures of “too big to fail” banks and subsequent market panics, of the kind we saw in autumn 2008.

There are good arguments that the law’s authors got the policy wrong, and enshrined “too big to fail” in federal law rather than preventing it. …

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Obama gets it right on EU airline tax

For those of you who say I never write anything complimentary about President Obama: He done good this time. From The Hill:

President Obama has signed into law a bill that requires U.S. airlines be excluded from European carbon emissions fees.

Environmentalists had framed the bill as the first test of the president’s commitment to fighting climate change in his second term and urged him to veto it. Obama quietly signed it Tuesday over their objections.

The European Union has been trying since I was living in Brussels to tax any airline, regardless of where it’s based, for the entirety of any flight that enters EU airspace, regardless of how little time the flight actually spends in EU airspace. So, a flight from Los Angeles to London would be taxed for the entire length of the trip, even though only a fraction of it was spent in EU skies.

I don’t think it diminishes what Obama did here to add: He really had no choice. Allowing another government to tax our businesses in this …

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Why the lawsuit against BoA/Countrywide could be a blockbuster

The name on the lawsuit is “Bank of America,” but the key word to those in the Beltway is “Countrywide,” one of the most reckless — and politically connected and active — companies involved in the subprime meltdown.

First, the key parts of the AP story about the lawsuit, in which the government is seeking more than $1 billion in damages:

U.S. Attorney Preet Bharara said Countrywide Financial, which was later bought by Bank of America, churned out mortgage loans from 2007 to 2009 without making sure that borrowers could afford them.

“The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope,” Bharara said in a statement. He said the suit was partly to recover money that Fannie and Freddie lost from defaulted loans.

Bank of America had no immediate comment.

Countrywide sold the loans to Fannie Mae and Freddie Mac, which were left to pay for the loans when they defaulted, according to the lawsuit. Fannie and Freddie were effectively nationalized in …

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The disturbing attacks on Chick-fil-A

There’s one part of Chick-fil-A President Dan Cathy’s recent remarks that the left seems especially intent on disproving: the part where he said,

… we live in a country where we can share our values and operate on biblical principles.

The rest of Cathy’s comments, if you haven’t already heard, concerned his opinion of the propriety of gay marriage from a biblical perspective. As retribution for his voicing this opinion, some liberals in Chicago and Boston want to deny Cathy and his company the right to operate in their cities.

This is disturbing on a number of levels, two in particular.

The first is the idea that local governments might deny a business license to a company because of the beliefs of its owners. In Chicago, Alderman Proco “Joe” Moreno threatened to do just that in his ward. (The city’s mayor, former Obama aide Rahm Emanuel, was more oblique, voicing sympathy with Moreno’s perspective but saying only that a Chick-fil-A restaurant in Chicago “would be a bad …

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2012 Tuesday: Obama wants the election to be about a topic he doesn’t understand

In Chicago yesterday, President Obama described the essence of his campaign against Mitt Romney. Asked during a press conference about his campaign ads criticizing Romney’s record at Bain Capital in the 1980s and ’90s, Obama disagreed with fellow Democrats’ advice to focus on other issues:

[T]his is not a distraction. This is what this campaign is going to be about — is what is a strategy for us to move this country forward in a way where everybody can succeed?

Well, now. That’s just completely different from every other presidential campaign in history…

Some commentary has focused on what Obama said just before that: his description of the job of president vs. the job of a private equity CEO. And with good reason. There is plenty to address: from his assertion that the president should be involved in helping individual communities plan their economic development, to the obvious conclusion that the job, as he’s described it, is not one he’s done particularly well given the …

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Poll Position: Is Facebook stock worth the asking price?

Facebook goes public today, listing shares on Nasdaq at $38 apiece; if you want to buy, trading of stock listed as “FB” commences at 11 a.m.

So, do you? Do you want to buy Facebook stock at that price?

On one hand, there is precedent for highly anticipated tech listings that soared and have not (to date) flamed out. Google of course comes to mind: The search-engine company went public in August 2004 at $85, more than doubled in price by year’s end, and has been trading lately in the $600s — more than seven times its IPO price.

Of course, Google has a way to make money, and lots of it. Facebook? Well, the numbers would indicate it’s at least as good a moneymaker as Google was circa 2004. But there was ominous news this week, when GM said it was pulling its paid advertisements on Facebook because it didn’t think they were effective.

At $38 a share, for a market cap of $100 billion-plus, would you buy Facebook stock?

  • No (43 Votes)
  • Yes (15 Votes)
  • I’ll leave this to the …

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From ‘too big to fail’ to even bigger in just four years

Some cheery news from Bloomberg to start your week: The banks that were “too big to fail” just four years ago are now even bigger than before:

Five banks — JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs Group Inc. — held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the Federal Reserve.

Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did in 2007 with the Fed-assisted rescue of Bear Stearns Cos. by JPMorgan and in 2008 with Citigroup and Bank of America after the Lehman Brothers bankruptcy, the largest in U.S. history.

“Market participants believe that nothing has changed, that …

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I hope your like your Super Bowl with a side of politics

It’s bad enough to watch bailed-out company after bailed-out company spend millions and millions of dollars for the most expensive TV advertising slots of the year. There were all those Chevy (GM) slots, as well as at least two for General Electric, whose financial arm survived 2008 in part because it received a federal guarantee of its debt valued at some $139 billion. At least GE didn’t cash in on that guarantee; GM is still part-owned by Uncle Sam and owes taxpayers some $25 billion according to a recent inspector general’s report. GM’s former financing arm, now known as Ally Financial, remains majority-owned by the federal government and owes about $12 billion.

But the halftime Chrysler commercial starring Clint Eastwood, describing America as being in its own “halftime,” was just overtly politicized. After all, what else could “halftime” have meant, in the year 2012, than halfway through the eight years Barack Obama would be president if re-elected this fall? I’m fairly …

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