Economic Recovery Measures
On Friday evening, the FDIC reported that it has taken over an additional five banks (American Marine Bank, First Regional Bank, Community Bank and Trust, Marshall Bank, Florida Community Bank,
For the fiscal hawks among us, he warns: "Our economic growth has been based … on borrowing from the future: we have been living beyond our means."
But, he has other worries for the immediate future:
At the start of the new decade, one in every ten Americans is unemployed. By broader measures of unemployment (including discouraged workers who may have stopped looking), nearly one out of every six people is unemployed or underemployed.
President Obama has just proposed a fee on financial firms, stating his commitment “to recover every single dime the American people are owed.” The measure, called the Financial Crisis Responsibility Fee, will only apply to the largest firms with over $50 billion in assets. The White House expects it to raise $117 billion over 12 years and $90 billion over the next ten.
The Financial Crisis Inquiry Commission, which was established to examine the causes of the economic and financial crisis, kicked off the first day of its first hearing today. The witnesses on the main panel today were the chairmen and CEOs of Goldman Sachs, JP Morgan & Chase, Morgan Stanley, and Bank of America. Commissioner statements and testimony can be seen here.
The Federal Reserve announced, this morning, that it will transfer $46.1 billion in FY2009 profits over to the Treasury, higher than the $31.7 billion in 2008 profits (Thanks to Donald Marron for pointing this out). The Fed reported that the increase in profits was due largely to earnings on additional securities holdings.
On January 8, the FDIC reported that it has taken over an additional bank (Horizon Bank) for a cost to the FDIC of about $540 billion. This brings the total number of failed banks since the beggning of 2008 to 167.
Laura Tyson, a former chair of President Clinton’s Council of Economic Advisers, warned in a Bloomberg op-ed this morning that cutting back on fiscal stimulus too early might undermine the economic recovery, but that deficit reduction will be a necessity when the economy recovers. According to Tyson: