Obama to Congress: No Time To Waste

Double-digit unemployment. A recession that lingers for years. That's what is coming to America should Congress dither over an ambitious $775 billion economic stimulus plan, its architect, President-elect Barack Obama, told the country yesterday. Obama won't be sworn in for another dozen days, but he's wasting no time pushing his economic stimulus package to the people, Business Week writes. The list of goodies in the package include: "a $1,000 income-tax cut, which he said would reach 95% of American families; spending on alternative energy initiatives; investing in infrastructure improvements including the electric grid and broadband lines; modernizing classrooms; and computerizing health records." Still, Obama faces a tough fight—even from within his own party. According to the New York Times, some Senate Democrats think the $775 billion plan is not bold enough; others would like to see a provision written in to help struggling homeowners, such as allowing bankruptcy courts the flexibility to modify home loans. 

The urgency Obama speaks of will no doubt be ratcheted up today after the Labor Department releases the December jobs figures. According to Business Week, some economists are predicting at least 625,000 job losses last month, a figure that would push unemployment to above 7 percent. the Wall Street Journal is going even higher, predicting the loss of  750,000 non-farm jobs. Business Week offers hardly reassuring context. "That's bad. But it's still not as bad as in the early 1990s, when it hit 7.6%, let alone the early 1980s, when it topped out at 10.8%." The U.S. jobs figure will be the most-watched piece of economic news all over the world today. Some countries aren't waiting for the official announcement. Yesterday, the Bank of England slashed rates to the lowest level in its history, and today South Korea followed suit, Reuters writes.

The markets in Europe all started off the day lower in early trading, the BBC reports, weighed down by the pessimistic jobs predictions and yesterday's tumble on the Dow, induced by a dismal sales decline at Wal-Mart last month.

Even as Obama stumps for his new aid package, there's increasing criticism being heaped on the last big bailout taxpayers were asked to pay for, the $700 billion TARP. The WSJ leads off its coverage today with a report that the Treasury Department is expected to be taken to task by a government watchdog group that finds Henry Paulson's team "has failed to reveal its strategy for stabilizing the financial system ... and has done nothing to help struggling homeowners." The newspaper quotes a draft report as saying, "The panel's initial concerns about the [Troubled Asset Relief Program] have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury."

The mess didn't end there yesterday. The New York Times kicks off its business coverage today with a report revealing that federal investigators are probing a small cabal of banks and other companies who may have colluded to essentially control the nation's $400 billion municipal bond business. It's the same investigation that forced New Mexico Gov. Bill Richardson to withdraw his name from consideration for the commerce secretary position last week. “Pay-to-play in the municipal bond market is epidemic,” a retired Internal Revenues Service official told the NYT. An antitrust lawyer representing some of the defrauded cities, counties and states called it “one of the longest-running, most economically pervasive antitrust conspiracies ever to be uncovered in the U.S.,” the newspaper writes.

Exxon calls for a carbon tax to tackle greenhouse gas emissions. Yep, you read that right. Both the WSJ and Houston Chronicle report on a speech made by CEO Rex Tillerson in which he advocates taxing emissions as a "more direct, a more transparent and a more effective approach" than the cap-and-trade mechanism currently in vogue in Congress and promoted by the Obama campaign. Cynics say Exxon—for many years a funder of research that is skeptical about climate change—is only taking this strident position because it knows a carbon tax is political poison for Democrats and Republicans alike, but Tillerson, who is the first Exxon CEO to acknowledge the contribution of fossil fuels to global warming, and whose new stance makes him an unlikely ally of Al Gore, insists that a "carbon tax 'is the most efficient means of reflecting the cost of carbon in all economic decisions,' —from company investments to consumer’s choices about fuel and other products," writes the Chronicle.

Prosecutors searching Bernie Madoff's office on the day he was arrested discovered 100 signed checks worth $173 million in the disgraced financier's desk, the NYT reports. The checks, ready to be mailed out, were intended for friends, family, and employees and are another indication that Madoff was trying to hide his ill-gotten assets from his investors, prosecutors contend. Over in the United Kingdom, the Financial Times reports that the Serious Fraud Office has launched a full investigation into Madoff’s U.K. dealings. The news comes as two former employees recounted how Madoff "ordered his UK company to transfer about $150m to his US firm just weeks before he allegedly confessed to running a $50bn fraud scheme".

And, finally, the NYT calculates today the potential endorsement value of Obama's BlackBerry addiction for the handset's maker, Canada's Research in Motion. "What could the 'BlackBerry president' charge for his plugs of the device if he were not a public servant?," the newspaper wonders. "More than $25 million, marketing experts say, and maybe as much as $50 million."