Kevin Earl Dayhoff Art One-half Banana Stems

Kevin Earl Dayhoff Art One-half Banana Stems - www.kevindayhoff.com Address: PO Box 124, Westminster MD 21158 410-259-6403 kevindayhoff@gmail.com Runner, writer, artist, fire & police chaplain Mindless ramblings of a runner, journalist & artist: Travel, art, artists, authors, books, newspapers, media, writers and writing, journalists and journalism, reporters and reporting, technology, music, culture, opera... National & International politics www.kevindayhoff.net For community: www.kevindayhoff.org For art, technology, writing, & travel: www.kevindayhoff.com

Showing posts with label Bus Econ Subprime Mort Crisis. Show all posts
Showing posts with label Bus Econ Subprime Mort Crisis. Show all posts

Thursday, December 11, 2008

Dixon and City Democrats Get Raises While Contemplating Layoffs


Public officials accepted a pay raise in this economic climate is beyond bizarre…

December 10, 2008

Dixon and City Democrats Get Raises While Contemplating Layoffs


ANNAPOLIS—On the Wednesday before Thanksgiving, Mayor Sheila Dixon, City Council President Stephanie Rawlings-Blake, City Comptroller Joan Pratt and the 13 other City Council members had pay raises approved by the Baltimore City Board of Estimates, which all three of them sit on. The move was done without identifying the titles or names of those receiving a raise. This comes at a time when Mayor Dixon has not ruled out layoffs for city workers and revoked cost of living raises for middle managers.

“Once again, this is an example of Maryland Democrat leaders operating under a different set of rules than the rest of us,” said MDGOP Chairman Jim Pelura. “These raises amount to $26,250 which is a substantial amount of money to anyone who is not a big-government politician. Mayor Dixon is talking about laying off lower level city workers. I certainly think that $26,250 might save at least one job. Do as I say, not as I do is becoming a common stance in Baltimore City and the state of Maryland.”

“We need new leadership for Maryland that puts taxpayers, small businesses, and working families first. There are several leaders who have volunteered to take part in the furloughs for state employees. Mayor Dixon, Council President Rawlings-Blake, and Comptroller Pratt should follow suit and reject these pay raises,” concluded Pelura.

###

To members of Maryland Republican Party FOR IMMEDIATE RELEASE CONTACT: Justin Ready 410-263-2125

Wednesday, November 26, 2008

This week in The Tentacle for November 26, 2008


This week in The Tentacle for November 26, 2008

Click here for more columns in The Tentacle by Kevin Dayhoff


Wednesday, November 26, 2008
“The Eight Years War”
Kevin E. Dayhoff
At high noon on Monday, amid cries of alarm that this is the worst economic crisis since the Great Depression, President-elect Barack Obama rolled out his all-star economic team and a call for an economic stimulus package that could cost as much as $1 trillion.


What to get the elderly for Christmas
Tom McLaughlin
Black Friday arrives the day after tomorrow and throngs of shoppers will line up for those “deals’ in a panic frenzy. Credit, debit and anything else that still has value will be maxed out during this holiday season because of the economy. Often left in the riot are your parents.


Tuesday, November 25, 2008
County Democratic Party's Castration – Part 1
Roy Meachum
This year marked a quarter century that I resided in Frederick. Someone who arrived later cannot possibly imagine the changes made. Most from the visionary and long-time city Mayor Ron Young. He created Carroll Creek development and modernized downtown streets from the horse and buggy days.


Monday, November 24, 2008
Lobb(y)ing Grenades
Richard B. Weldon Jr.
At a recent Board of County Commissioners hearing, Commissioner, and self-described "country lawyer, John L. "Lennie” Thompson, Jr., gave Annapolis lobbyists a piece of his mind. Lennie needs a new enemy; his style of bare-knuckled populist politics works best when he has a boogeyman to attack.


A Saturday with the Sheriff
Steven R. Berryman
On Saturday I found myself waiting outside the Church of the Brethren for Chuck Jenkins, sheriff of Frederick County. He was late, but I don’t blame the man, as he is in highest demand during these troubled and newly formative days.


Friday, November 21, 2008
Katrina's Official Murderers
Roy Meachum
A good friend from New Orleans called the other day; he works for Holy Cross where I started as a boarding student when I was nine years old. The dormitories were ripped up more than 20 years ago by Hurricane Betsy; nobody lives there these days.


Secularism’s Effects on A Society
Joe Charlebois
Secular socialism has made steady inroads into our society since the early 1960s when prayer was being removed from the schools. What has this led too?


Thursday, November 20, 2008
A Radical Makeover
Chris Cavey
Since the November 4th election, there has been much ballyhoo about the redefinition and much needed re-packaging of the Republican Party, especially as to whom should be the authors and leaders of this remake and even how to get started.


The Good, The Bad and The Hopeful
Joan McIntyre
Ever have one of those times where you just can't shake that feeling of dread? I normally have an uncanny ability to find good in just about every situation. It's not happening this time.


Wednesday, November 19, 2008
Rewarding Bad Behavior
Kevin E. Dayhoff
Instead of tooling down the highway in the fast lane, two months after General Motors celebrated its 100th Birthday on September 16, it found itself huddled over at an intersection with fate, harassing passers-by with a tin pan in hand.


Fulfilling A Dream
Tom McLaughlin
“What has possessed you, Tom,” many have asked. “Leaving the country for Borneo Island for a year,” they wonder. “And what about your health?”


Baltimore Hippodrome's "Grinch"
Roy Meachum
What a delightful idea! Baltimore's Hippodrome Theatre decided to bring in for the holidays "Dr. Seuss' How the Grinch Stole Christmas! The Musical."


Tuesday, November 18, 2008
New Terms and Limits in Iraq
Roy Meachum
While George W. Bush's order to invade Iraq made headline news, the several papers I read cast the real outcome somewhere in the back pages.


A Once-A-Year Happening
Farrell Keough
“[A]m I my brother’s keeper?” This was the statement Cain gave to God when questioned about the location of Abel, whom Cain murdered. It has become part of our cultural colloquialisms – generally applied when asking about our responsibility to help others.


Walkersville’s Welcome Wagon
Joe Charlebois
Well, the ugly head of unforeseen consequences has reared its ugly head. The Town of Walkersville, in its determination to keep the Ahmadiyya Muslim Community from building their worship and conference facilities, has ultimately broken the back – if not the pocketbook – of the Banner School family.


Monday, November 17, 2008
Avoiding The Temptation
Richard B. Weldon Jr.
I supported John McCain throughout the recent presidential election. Having written an entire column about why, there's no reason to re-plow that field.


Befuddled in Frederick
Steven R. Berryman
What strange days we are living in. My sympathy goes out to those whose intellectual process it is to attempt to make sense of the world around them.


Landfill & Waste-to-Energy Q & A
Joan McIntyre
My last column (from November 6) generated many questions. Trash in Frederick County certainly seems to be the hot topic. Trash is a given and we need to get out of our holding pattern. So, here I've done my best to address many of your questions.

20081126 This week in The Tentacle

Welcome to the Coffee Shop Bank and Trust Company by Kevin Dayhoff


Welcome to the Coffee Shop Bank and Trust Company by Kevin Dayhoff


Posted on http://www.explorecarroll.com/ 11/19/08

Click here for more columns by Kevin Dayhoff on http://www.explorecarroll.com/


Welcome to the Coffee Shop Bank and Trust Company by Kevin Dayhoff


I was sad to see last week that the Pour House Café on East Main Street in Westminster was closing.

The unreal irony of the untimely demise of a popular local gathering place came with another piece of news from last week: According to ABC News: "Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week."

"Reporters caught the AIG executives on hidden cameras poolside and leaving the spa." I'm not making this up.

It was reported that AIG spent an estimated $343,000 on the junket.

I'll venture a guess that just the interest on that $343,000 alone could have kept the local Main Street shop in business.

No word as to whether owners of the Pour House considered lobbying the U.S. Treasury Department for a piece of the $700 billion bailout plan passed by Congress in the waning weeks of the 2008 presidential campaign.

But hey, why not? Everyone else is. According to an article in the International Herald Tribune, the "Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers -- as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists."

We all heard the rhetoric during the election campaign about how everyone is so concerned about "Main Street."

I kinda expected Treasury Secretary Henry Paulson, House Financial Services Committee chairman Barney Frank (D-Mass.), Senate Banking Committee chairman Sen. Chris Dodd (D-Conn.), and Speaker of the House of Representatives Nancy Pelosi (D-Calif.), to show up on Main Street in Westminster, order a vente double-shot mocha latte with lowfat soy and hand the Pour House a check.

Nah. That could never happen. These folks don't really know where "Main Street" is.

The other avenue of approach for the coffee house would have been to convert itself into a bank. I read the same day that the credit card company, American Express, was converted into a bank like Morgan Stanley and Goldman Sachs -- so that it was eligible for a handout from the government.

As soon as the "Coffee Shop Bank and Trust" opens, it could take $343,000 junkets and be eligible for great seven-figure bonuses.

Hey, bean counting is bean counting.

Right after the news was revealed about the $343,000 AIG junket, the Federal Reserve System announced it was going to increase the company's bailout by $27 billion to a total of $150 billion.

Those folks who run AIG are no fools. That's a great return on misappropriating $343,000 of taxpayer dollars.

Along the same lines, I felt really bad to read a Reuters article that reported that "Wall Street bonuses could tumble 41.3 percent." Tumble?

Well, I tumbled out of my chair to read that economists "say each securities industry job on average paid $379,000 last year."

Now, according to Reuters, "Wall Street' high flyers are likely to see their bonuses take a brutal hit this year -- bonuses could be cut in half to $16 billion." Now that's brutal.

All this for an industry which Jay Leno described best: "The United States," he said, "has developed a new weapon that destroys people but it leaves buildings standing.

"It's called the stock market."

Is this a great country or what?


####

http://explorecarroll.com/opinion/1621/welcome-coffee-shop-bank-trust-company/

20081119 WE Welcome to the Coffee Shop Bank and Trust Co weked


Click here for more columns by Kevin Dayhoff on http://www.explorecarroll.com/

Turkey, stuffing, illegal radios and rowdy college kids
Published November 23, 2008 by Sunday Carroll Eagle
This Thursday is Thanksgiving, and we at The Eagle hope you have a great turkey-day with lots of food, friends and family. Perhaps because of our...

Welcome to the Coffee Shop Bank and Trust Company
Published November 19, 2008 by Westminster Eagle
I was sad to see last week that the Pour House Café on East Main Street in Westminster was closing. The unreal irony of the...

At Westminster polls in 1920, the 'Women Disappointed Them'
Published November 16, 2008 by Sunday Carroll Eagle
EAGLE ARCHIVE The fact that women gained the right to vote was a milestone that got mixed reviews in Carroll County after the 19th Amendment...

Life work of Sargent Shriver began in Westminster
Published November 12, 2008 by Westminster Eagle
Twenty years ago this week the community was abuzz in anticipation of one of Carroll County's most celebrated native sons, Robert Sargent Shriver Jr. returning...

Patriotic, misty-eyed and corny about our Election Day
Published November 9, 2008 by Sunday Carroll Eagle
EAGLE ARCHIVE Last Tuesday, after two years, 45 debates and $2.4 billion spent, American voters finally had their day. Is it just me, or does...

Sunday, November 23, 2008

Do We Need the Big Three? by George Will Tuesday, November 18, 2008

Do We Need the Big Three? by George Will Tuesday, November 18, 2008

WASHINGTON -- "Nothing," said a General Motors spokesman last week, "has changed relative to the GM board's support for the GM management team during this historically difficult economic period for the U.S. auto industry." Nothing? Not even the evaporation of almost all shareholder value?

GM's statement comes as the mendicant company is threatening to collapse and make a mess unless Washington, which has already voted $25 billion for GM, Ford and Chrysler, provides up to $50 billion more -- the last subsidy until the next one.

[…]

The answer? Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled, allowing the companies to try to devise plausible business models. Instead, advocates of a "rescue" propose extending to Detroit the government's business model for the nation -- redistributing wealth from the successful to the failed, an implausible formula for prosperity.

[…]

Those Democrats, their rhetoric notwithstanding, really care most about the union. "Saving the planet" comes second and last comes the health of the auto companies.

{…}


Read the entire column here: Do We Need the Big Three? by George Will

20081118 Do We Need the Big Three by Will Nov18 2008

Running on empty – What a difference an election makes


Running on empty – What a difference an election makes

November 23, 2008 by Kevin Dayhoff


By the end of last week the prospect of an auto bailout was running on four flat tires.

However, with the backdrop of the economy continuing to remain at the forefront of the media spotlight, the “Detroit Three,” General Motors, Ford and Chrysler, continue their tours de force beg-a-thon performance in the media with a great deal of support coming from the Democrat Party.

What a difference an election makes. If you will remember, during the election campaign, the Democrats railed about the increase in the national debt, increased spending, and failed economic policies.

And of course, earlier in the 2008 presidential campaign, when the price of oil and gasoline spiked, it was President George W. Bush’s fault. After the price of gas fell precipitously, the Democrats and their media sycophants fell strangely silent.

Moreover, on Election Day, when the Wall Street rallied, the media credited the prospects of the election of presidential candidate Illinois Sen. Barack Obama with the reasons for the uptick in the stock market.

The day after the election the stock market had the largest percentage drop in history on the day after an election. The media was silent – as in crickets chirping…

Many credited the election victory of Senator Obama on the chaos in the economy. Of course, the great paradox is that the very same foxes, House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., House Financial Services Committee chair Barney Frank, D-Mass., and Senate Banking Committee chair Sen. Chris Dodd, D-Conn., who caused the chaos in the financial henhouse have now been rewarded and are now in charge of protecting and fixing it. (See It’s the Congress, Stupid!, Congress and the Rattlesnake – Part 1, Congress and The Rattlesnake – Part 2, Congress and The Rattlesnake – Part 3.)

Now these very same folks want to work their magic on the automobile industry in the United States – with taxpayer money, of course. They want to further raise the national debt by bailing out the Detroit Three – which is the focus of my “The Tentacle” column this week: Rewarding Bad Behavior

As an aside, speaking of changing his tune, you will notice that President-elect Obama has been eerily silent about Iraq, Guantanamo Bay Naval Base, and other aspects of his war on the Bush Administration’s national security polices now that he has been given a number of national security briefings.

Nevertheless, there remains a nagging concern that international terrorists are still plotting to kill Americans and we are still fighting two interminable ground wars overseas. The Iranians and North Koreans are still playing with their nuclear erector sets. Somali pirates are seizing ships in one of the world’s busiest shipping lanes outside of the Gulf of Aden.

And in spite of the predicted outbreak of the Age of Aquarius as a result of the recent election, we find ourselves in economic chaos which continues to escape appropriate hyperbole and reactionary rhetoric.

Congress and our critical financial conglomerates have behaved so badly that their behavior raised the specter that the United States and the world would revisit the joys and riches of the Medieval Ages if something was not done.

Yet last week, the financial bailout had the look and feel of a circular firing squad as Treasury Secretary Henry Paulson stood before the nation, and said something to the affect: “You know, about that initial bailout strategy… Well nevermind, the facts have changed and we now have a new and improved pyramid scheme to sell you.”

His performance had all the reassuring aspects of a snake oil salesman from the 1890s as he sketched-out a new approach to encourage consumer confidence, borrowing, and get American families back in the mood for opening their pocketbooks.

No word as to how many Google searches occurred for “economic feudalism” last week as Americans started to feel like feudal serfs being sacrificed as a result of the lack of leadership of the overlords.

If this were not enough of a witches brew, many Americans – and the stock market – continue to feel morning sickness in a pregnant pause of anxiety over president-elect Obama’s election rhetoric to revisit free trade agreements, raise taxes, and unleash a new social-welfare system upon the nation that would make President Franklin D. Roosevelt green with envy.

Intellectual, morally and economically, a glance at Washington these days indicates that it not only the Detroit Three that is in trouble these days, the American taxpayer is more at risk than ever as a result of Congress running on empty.

####

20081119 Running on empty (752 words)

Wednesday, November 19, 2008

Today in the DC Examiner: An Auto Bailout is Like Sending Arsonists to Fight Fires

Today in the DC Examiner: An Auto Bailout is Like Sending Arsonists to Fight Fires

November 19, 2008

Will Obama back missile defense or back missile defense into history?

Examiner Editorial: Liberals have been saying for decades that missile defense can't work, even as the U.S. Army and Navy are repeatedly and successfully testing land and sea-based systems that destroy incoming missiles. Will Barack Obama listen to the liberals or the military?

S.J. Masty's Time Machine: Maybe Charlie Chan can solve the mystery of who shot the GOP.

Jay Ambrose: Our Denver-based Herald of the Rockies is having second thoughts about Obama's first promises.

Tapscott's Copy Desk: Harry Reid and Robert Byrd falsified government data on job creation. Will the Mainstream Media call them on it?

And don't miss a former GM manager's explanation for why she opposes a federal bailout for Detroit's Big Three: You will find Lori Roman's Op-Ed here: “An Auto Bailout is Like Sending Arsonists to Fight Fires

20081119 Today in the DC Examiner: An Auto Bailout is Like Sending Arsonists to Fight Fires

This week in The Tentacle

This week in The Tentacle

Wednesday, November 19, 2008

Rewarding Bad Behavior

Kevin E. Dayhoff

Instead of tooling down the highway in the fast lane, two months after General Motors celebrated its 100th Birthday on September 16, it found itself huddled over at an intersection with fate, harassing passers-by with a tin pan in hand.

William C. Durant formed General Motors (GM) as a holding company in 1908 for Buick. He subsequently took on overwhelming debt by purchasing the manufacturers of Oldsmobile, Cadillac, Elmore and Oakland. After a dramatic drop in automobile sales, Mr. Durant lost control of the company two years later to one of the many powerful bankers’ trusts of the time.

A hundred years later, the “Detroit Three,” – Ford, GM and Chrysler – have lost control of their companies to the United Auto Workers (UAW.)

After decades of being blackmailed with the threat of crippling union strikes, the Detroit Three finds themselves with uncompetitive work rules. It manufactures products which continue to languish with the perception that they lack the quality of their competitors. They offer numerous models, in which the American consumer has little or no interest. They make these automobiles with enormously uncompetitive salaries and benefits; and now the American taxpayers are being asked to bail them out.

Read the entire column here: Rewarding Bad Behavior


Fulfilling A Dream
Tom McLaughlin
“What has possessed you, Tom,” many have asked. “Leaving the country for Borneo Island for a year,” they wonder. “And what about your health?”


Baltimore Hippodrome's "Grinch"
Roy Meachum
What a delightful idea! Baltimore's Hippodrome Theatre decided to bring in for the holidays "Dr. Seuss' How the Grinch Stole Christmas! The Musical."


Tuesday, November 18, 2008
New Terms and Limits in Iraq
Roy Meachum
While George W. Bush's order to invade Iraq made headline news, the several papers I read cast the real outcome somewhere in the back pages.


A Once-A-Year Happening
Farrell Keough


“[A]m I my brother’s keeper?” This was the statement Cain gave to God when questioned about the location of Abel, whom Cain murdered. It has become part of our cultural colloquialisms – generally applied when asking about our responsibility to help others.


Walkersville’s Welcome Wagon
Joe Charlebois
Well, the ugly head of unforeseen consequences has reared its ugly head. The Town of Walkersville, in its determination to keep the Ahmadiyya Muslim Community from building their worship and conference facilities, has ultimately broken the back – if not the pocketbook – of the Banner School family.


Monday, November 17, 2008
Avoiding The Temptation
Richard B. Weldon Jr.
I supported John McCain throughout the recent presidential election. Having written an entire column about why, there's no reason to re-plow that field.


Befuddled in Frederick
Steven R. Berryman
What strange days we are living in. My sympathy goes out to those whose intellectual process it is to attempt to make sense of the world around them.


Landfill & Waste-to-Energy Q & A
Joan McIntyre
My last column (from November 6) generated many questions. Trash in Frederick County certainly seems to be the hot topic. Trash is a given and we need to get out of our holding pattern. So, here I've done my best to address many of your questions.


Friday, November 14, 2008
Newly "Dis-Organized" Party
Roy Meachum
Three months after Franklin Delano Roosevelt was sworn in as the first Democratic president since Woodrow Wilson, Oklahoma-born comedian Will Rogers said on his weekly radio show: "You've got to be optimist to be a Democrat and you've got to be a humorist to stay one." Mr. Rogers was also quoted: "I belong to no organized political party – I’m a Democrat."


Thursday, November 13, 2008
Onward and Upward, Not Backwards
Tony Soltero
Now that the election is behind us, there's no shortage of analyses being offered by pundits left, right, and center about “What It All Means.” So here are a few bullet points of my own as a contribution to the discussion.


My President
Patricia A. Kelly
I’ve lived a pretty long time. I was alive and conscious during the civil rights movement. In fact, during that time, my mom drove my brother and me through the South every summer to visit my grandparents.


Wednesday, November 12, 2008
The Incredibly Shrinking Republican Party
Kevin E. Dayhoff
The ink is hardly dry on the “historic” election of Illinois Sen. Barack Obama and already those with 20/20 hindsight are dissecting and revising the two-year ordeal, known as the 2008 presidential election, with the conviction of someone who has just seen a flying saucer land in the backyard.


Just Bustin’ Out All Over
Tom McLaughlin
It was as if a massive salt water wave swept over the country and washed away all of the hate and intolerance. I felt cleansed, jubilant and am still high from the November 4 election results. No more African-Americans, or Chinese-Americans, or Native Americans. We are all Americans.


Tuesday, November 11, 2008
Please, Jennifer, Not Again
Roy Meachum
Jennifer Dougherty's loss record for elections stands four-to-one after Tuesday's drubbing by Rep. Roscoe Bartlett. The only time she won, incumbent Mayor Jim Grimes shot himself in the foot. Repeatedly. When she tried for a second term, her own party dumped her; the first mayor in modern times to be defeated in a primary.


“It’s Good To Be A Teacher…”
Nick Diaz
Work-to-rule, teachers’ contract, planning time, Board of Education, FCTA, negotiated agreement – these topics, and more, have surfaced recently in Frederick concerning local education issues.

Monday, November 10, 2008
Election Post Mortem
Steven R. Berryman
Election 2008 is over. America now has a new president-elect, and an opportunity to evaluate just what Barack Obama’s victory means. Here are some lessons learned along with some 20/20 hindsight.

20081119 This week in The Tentacle

Tuesday, November 18, 2008

Today in the DC Examiner: Are we bailing out dead donkeys?

Today in the DC Examiner: Are we bailing out dead donkeys?

November 18, 2008

Examiner Editorial: Treasury Secretary Henry Paulson is handing out billions of tax dollars to selected Wall Street firms, but refuses to disclose any details of who, how much or with what in return. This is a major scandal-in-the-making.

Quin Hillyer: The Supreme Court agrees to hear another case that could put McCain-Feingold regulation of political speech in the legal garbage can where it belongs.

Examiner OpEd: John Hawkins pens an open letter to GOP members of the U.S. Senate, challenging them to try something new.

20081118 Today in the DC Examiner Are we bailing out dead donkeys?

Saturday, November 15, 2008

Presidents Radio Address for November 14 2008

Presidents Radio Address for November 14 2008

For Immediate Release
Office of the Press Secretary
November 14, 2008
President's Radio Address
President's Radio Address Audio En Español

In Focus: Economy

THE PRESIDENT: Good morning. This weekend I am hosting a summit on the global financial crisis with leaders of developed and developing nations. By working together, I'm confident that with time we can overcome this crisis and return our economies to the path of growth and vitality.

I know many of you listening are worried about the challenges facing our economy. Stock market declines have eroded the value of retirement accounts and pension funds. The tightening of credit has made it harder for families to borrow money for cars, homes, and education. Businesses have found it harder to get loans to expand their operations and create jobs. Many nations have suffered job losses and have serious concerns about the worsening economy.

Nations around the world have responded to this situation with bold measures, and our actions are having an impact. Credit markets are beginning to thaw and businesses are gaining access to essential short-term financing. It will require more time for these improvements to fully take hold and there will be more difficult days ahead, but the United States and our partners are taking the right steps to get through the crisis.

As we address the current crisis, we also need to make broader reforms to adapt our financial systems to the 21st century. So during this summit, I will work with other leaders to establish principles for reform, such as making markets more transparent and ensuring that markets, firms, and financial products are properly regulated.

All these steps will require decisive actions from governments around the world. At the same time, we must recognize that government intervention is not a cure-all. While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.

This is a decisive moment for the global economy. In the wake of the financial crisis voices from the left and right are equating the free enterprise system with greed, exploitation, and failure. It is true that this crisis included failures by lenders and borrowers, by financial firms, by governments and independent regulators. But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people around the world.

The benefits of free market capitalism have been proven across time, geography, and culture. Around the world free market capitalism has allowed once impoverished nations to develop large and prosperous economies. And here at home, free market capitalism is what transformed America from a rugged frontier to the greatest economic power in history.

Just as important as maintaining free markets within countries is maintaining the free movement of goods and services between countries. There are many ways for nations to demonstrate their commitment to open markets. The United States Congress can take the lead by approving free trade agreements with Colombia, Panama, and South Korea before adjourning for the year.

In the long run, Americans can be confident in the future of our economy. We will work with our partners around the world to address the problems in the global financial system. We will strengthen our economy. And we will continue to lead the world toward prosperity and peace.

Thank you for listening.

# # #

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2008114 Presidents Radio Address for November 14 2008

Friday, November 14, 2008

Bailout man by Eva Moon

Bailout man by Eva Moon

November 14, 2008 - Thank goodness it's Friday

http://www.youtube.com/watch?v=uZUXXSxZPhw

Can anything make the Wall Street bailout even slightly more palatable? Probably not. But Eva Moon mixes it up with a little funk and sex? Music and lyrics by Eva Moon. Ferko Saxmanov on sax, Tym Parsons bass and guitar. http://evamoon.net Category: Comedy





Photo from: “Bailout Man” by Eva Moon http://evamoon.net/ Oct. 6, 2008

20081114 Bailout man by Eva Moon

The Onion - In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

Thank goodness it's Friday


In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

20081113 The Onion In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

Wednesday, November 12, 2008

Irate Congressman Demands Resignation of AIG CEO


Irate Congressman Demands Resignation of AIG CEO

Rep. Elijah Cummings: Latest "Junket" Violates AIG Pledge

By JOSEPH RHEE November 11, 2008—

A leading critic of AIG today demanded the company's CEO resign in the wake of the disclosure of yet another "junket" at a resort spa. In a letter to AIG's CEO Edward Liddy, Congressman Elijah Cummings (D-Md.) said the decision to hold an event for independent financial advisors last week at a luxury Phoenix resort was "outrageous" given an earlier pledge by Liddy to curtail such events.

Cummings wrote that AIG can begin to restore its trust with Congress "by accepting your resignation from the positions of chairman and chief executive officer."

Reporters for abc15.com (KNXV) caught top AIG executives on hidden camera at a secretive gathering last week at the luxurious Pointe Hilton Squaw Peak Resort in Phoenix. AIG instructed the hotel to make sure no company logos and signs were seen on the property, according to a company spokesman.

Click here to see the full KNXV report.

In his letter, Cummings questioned how the Phoenix event could have taken place given Liddy's earlier assurances that "not one cent of taxpayer dollars" would by used to pay for such events. The decision to hold the event while AIG was asking for billions of dollars more in federal loans was "even more shocking", wrote Cummings.

[…]

Click here to read letter.

[…]

Click here to read AIG's full response.

Cummings asked Liddy to provide him with details on who the sponsors were and how much money they were providing, as well as an itemized list of expenses incurred by AIG. Cummings also requested a list of each of the
160 planned events that AIG said it had cancelled on or after October 30.

[…]


Read the entire article here: Irate Congressman Demands Resignation of AIG CEO

http://www.abcnews.go.com/Blotter/WallStreet/story?id=6230818&page=1

20081111 Irate Congressman Demands Resignation of AIG CEO

Sunday, November 09, 2008

A Look at Maryland Economic Issues by Barbara Paulsen




A Look at Maryland Economic Issues by Barbara Paulsen

November 3, 2008



Webmaster’s note: Maryland continues to lose jobs in the private sector because of the state’s well-deserved reputation for being anti-business and tax-hell. Moreover, folks are leaving the state in a tax-flight that shows no abatement in the foreseeable future.

However the article skirts this economic dynamic ever so euphemistically.

It says: “The manufacturing sector, however, continues to disappoint and accounts for increasingly fewer jobs as it continues to shrink. While the loss of these jobs has slowed in the past three years, it remains the biggest economic drag on the state's economy. Maryland is trying to shift from labor-based manufacturing jobs to more science and knowledge-based jobs. But attempts to lure large international corporations have been hurt by the high cost of doing business in the state.

“… For several consecutive years more people have moved out of Maryland than moved in, largely because of people searching for cheaper housing.”

Kevin Dayhoff





Unlike many states, Maryland has historically had a relatively robust and diversified economy that allows it to maintain healthy growth. But the future of Maryland's economy, like that of the nation, is uncertain.

Underpinning its economic diversity is a highly educated workforce — one of the nation's highest ratios of Ph.D. holders — and virtually full employment. There are a large number of well-paying jobs in government, health care and education. The unemployment rate was just 3.6 percent last year, among the nation's lowest. And Maryland ranks fifth in personal income in the nation.

The federal government acts as a stabilizing force in Maryland's economy. "Maryland is blessed by its geography," said Daraius Irani, director of the Regional Economic Studies Institute at Towson University outside Baltimore.

[…]

The manufacturing sector, however, continues to disappoint and accounts for increasingly fewer jobs as it continues to shrink. While the loss of these jobs has slowed in the past three years, it remains the biggest economic drag on the state's economy. Maryland is trying to shift from labor-based manufacturing jobs to more science and knowledge-based jobs. But attempts to lure large international corporations have been hurt by the high cost of doing business in the state.

Housing prices in Maryland are expected to drop more than 10 percent in the next year, slightly less that the national average. For several consecutive years more people have moved out of Maryland than moved in, largely because of people searching for cheaper housing.


Read the entire article here: A Look at Maryland Economic Issues by Barbara Paulsen

http://abcnews.go.com/Business/Economy/story?id=4804449

20081103 A Look at Maryland Economic Issues by Barbara Paulsen

Recession Nation: 49 States at Risk By Scott Mayerowitz


Recession Nation: 49 States at Risk By Scott Mayerowitz

ABC NEWS Business Unit Nov. 3, 2008—


Hat Tip: B5 who lives in Alaska. He suggested that I “Check out this article and then tell me why you aren't considering moving to this great (Republican) State.”

In March, Five States Were in Recession; Now There Are 30, With 19 More at Risk

No state is immune from falling into a recession, except for one: oil-rich Alaska.

What started out as a housing problem in a few states has now exploded into a full-fledged recession, with a majority of states now in or dangerously close to recession.

At the end of September, 30 states were in recession, according to
Moody's Economy.com. Back in March, only five states were in recession: Arizona, California, Florida, Michigan and Nevada.

[…]

The just leaves one part of the country -- Alaska -- with a still-expanding economy. (The District of Columbia, with its government and government-related jobs, also still has an expanding economy.)

"There's no way around the map. It says the nation is in recession. The recession is coast to coast," Mark Zandi, chief economist and co-founder of Moody's Economy.com told ABC News recently. "One of the unique features of this downturn is how broad-based it is, regionally."

What happened between March and today?

"The job market has eroded measurably and industrial production has weakened sharply in the last couple of months. Those are the two key things. The other thing is that retail sales have also sharply weakened," Zandi said.

The one bright side is part of the middle of the country. Agriculture and energy are still strong and providing jobs.

[…]

"The exception is the part of the country between the Mississippi River and the Rockies, which is still doing pretty well," he said. "High farm prices are good if you are in Iowa. High oil prices are good if you are in Houston."

Peter Morici, an economics professor at the University of Maryland, said a decline in manufacturing is really hurting the Rust Belt. That said, the economy still is very regional and industry-specific.

[…]

"The state governments are an exercise in irresponsibility. Through the property boom, they enjoyed the increase in people's assessments," Morici said. "They are just not structured to handle the cynical movements in their revenue the way they should be.

"Just like companies, municipalities can behave irresponsibly in good times, not shore up any money for bad times and then go crying to the federal government when they need cash," he added.

Read the entire article here: Recession Nation: 49 States at Risk

ABC News Internet Ventures

http://abcnews.go.com/Business/Economy/story?id=6158877&page=1

20081103
Recession Nation: 49 States at Risk By Scott Mayerowitz

Friday, October 31, 2008

Landmark suspends sale of assets, but not the Pilot

Landmark suspends sale of assets, but not the Pilot

By Philip Walzer The Virginian-Pilot © October 30, 2008 NORFOLK

Related:

Locally, Landmark owns the Carroll County Times in Westminster Maryland.

20080104 Company looks into sales scenarios by Carrie Ann Knauer

Landmark considers possible sale of Pilot, Weather Channel (Jan. 3, 2008)

Weather Channel's profitability is behind sale, says Landmark executive (Jan. 10, 2008)

Arkansas company scouts The Virginian-Pilot, other papers (June 29, 2008)

Weather Channel deal sealed for $3.5 billion to NBC group (July 7, 2008)

Sale of Landmark TV station in Nashville falls through (Oct. 15, 2008)

Full archive on the Landmark Communications sale

Landmark Media Enterprises LLC, citing the "credit crisis," announced Wednesday that it has taken most of its properties, including Dominion Enterprises, off the market. But the company is continuing negotiations to sell The Virginian-Pilot.

"We are having discussions regarding The Virginian-Pilot Media Companies with an interested buyer," Landmark's vice chairman, Richard F. Barry III, said Wednesday. "The buyer is encouraged about obtaining financing."

He declined to identify the prospective buyer or say when he expected the sale to be completed.

The Virginian-Pilot and its affiliates employ about 1,260 people, mostly in Hampton Roads. The Pilot's associated businesses include Web sites such as Pilotonline.com and more than a dozen specialty publications, such as Link, Port Folio Weekly, Inside Business, and newspapers on military bases.

[…]

Newspaper-industry analyst John Morton said he wasn't surprised that Landmark was dropping its plans to sell most of its businesses. He noted that other newspapers remain on the market, including most of Cox Enterprises' publications and the San Diego Union-Tribune.

"The market is awash in sellers and no buyers," said Morton, who is based in Silver Spring, Md. "Right now it's the credit, but it wasn't happening before the credit tied up. People are very leery. They're not sure what they should pay or how well the newspapers are going to come out of the recession they've been in."

Facing steep market declines in advertising revenue and circulation, newspapers have lost more than half of their value since 2002, he said.

Landmark officials announced in January that they were looking to sell all of the businesses owned by the privately held media company. They did not offer a reason.

In September, Landmark completed the sale of its most profitable business, The Weather Channel Cos., to NBC Universal and two private-equity firms. The sal e price was not disclosed, but people close to the parties said it was about $3.5 billion.

Two weeks ago, however, Landmark announced that the planned sale of its Nashville television station to Bonten Media Group Inc. of New York had fallen through because of credit-market problems.

Landmark's businesses, minus The Weather Channel Cos., have combined revenues exceeding $1 billion a year, Barry said.

[…]


Read the entire article here: Landmark suspends sale of assets, but not the Pilot

http://hamptonroads.com/2008/10/landmark-suspends-sale-most-assets-not-virginianpilot

20081030 Landmark suspends sale of assets but not the Pilot

Friday, October 24, 2008

Would the Last Honest Reporter Please Turn On the Lights? By Orson Scott Card

Would the Last Honest Reporter Please Turn On the Lights? By Orson Scott Card

When I wrote Journalistic Bubble Wrap in The Tentacle on October 15, 2008 -

One of the hottest subplots to the 2008 presidential campaign is how would the contest, the polls and the final outcome have looked if the “old – elite” media had not been so biased towards the Democratic Party in general and specifically the Democrat nominee, Illinois Sen. Barack Obama.

I wish I had written it as well as when Orson Scott Card wrote Would the Last Honest Reporter Please Turn On the Lights?

Would the Last Honest Reporter Please Turn On the Lights?

October 5, 2008 - Featured on Rush Limbaugh 10/22/08


http://www.ornery.org/essays/warwatch/2008-10-05-1.html

Editor's note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism.

An open letter to the local daily paper — almost every local daily paper in America:

I remember reading All the President's Men and thinking: That's journalism. You do what it takes to get the truth and you lay it before the public, because the public has a right to know.

This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan? It's a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.)

Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending?

I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate."

Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed.

As Thomas Sowell points out in a TownHall.com essay entitled "Do Facts Matter?" (
http://snipurl.com/457townhall_com] ): "Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury."

These are facts. This financial crisis was completely preventable. The party that blocked any attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the Republican Party.

Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie. Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout!


Read the rest here: Would the Last Honest Reporter Please Turn On the Lights?


20081005 Would the Last Honest Reporter Please Turn On the Lights? By Orson Scott Card

My three part series on the current economic mess in The Tentacle


My three part series on the current economic mess in The Tentacle


Folks have been asking where they can find my three-part series on the current economic mess in The Tentacle from October 1, 2 and 3, 2008.

They may be found here:

October 3, 2008
Congress and The Rattlesnake – Part 3
Kevin E. Dayhoff
On May 13, 2008, Democratic presidential nominee Barack Obama compared the current housing crisis in the U.S. to the Great Depression in a campaign stop in Missouri.


October 2, 2008
Congress and The Rattlesnake – Part 2
Kevin E. Dayhoff
For several weeks the nation and the world have been watching the financial news emanating from Washington and Wall Street with that “deer in headlights” look as everyone holds their breath in disbelief and worries another shoe will drop.


October 1, 2008
Congress and the Rattlesnake – Part 1
Kevin E. Dayhoff
In response to the increasing wrath of the American voter, the U.S. House of Representatives came to its senses on Monday and voted 288 to 205 to kill the rash and ill-conceived proposed $700 billion bailout of Wall Street.

20081003 My three part series on the current economic mess in The Tentacle

Friday, October 10, 2008

This week in The Tentacle

This week in The Tentacle

Friday, October 10, 2008

Taliban, Welcome
Roy Meachum
The Bush Administration has not posted signs, not yet, welcoming the Taliban back to Afghanistan. But all the signs and indices are there.

The Future of Maryland Medevac
Kevin E. Dayhoff
The recent tragic crash of the Maryland State Police aviation command Medevac helicopter has unfortunately developed a subplot for those who wish to further a debate about the future of the vital air rescue service.

Thursday, October 9, 2008

Slots and The Second Debate
Richard B. Weldon Jr.
Lots of debate, discussion, and focus on politics in the last few weeks is responsible for a swirling mix of thoughts.

Wasting Taxpayers Time
Joan McIntyre
Anyone looking in on Frederick from the outside on Tuesday would have thought “what a bunch of idiots.” Taking a moment in time to look at us would not bode well. But follow the path backwards for a bit and you will find the same common denominator at the beginning of just about every drama that has gone on in our county over the past two years. One person.

March to The Battleground
Chris Cavey
Saturday was a typical clear early autumn day; cool, crisp and damp as the early morning saw a dedicated group of Maryland for McCain campaign workers heading south to Fairfax, Virginia, to help the cause in that highly targeted state.

Wednesday, October 8, 2008

TFC Mickey Lippy – Hero
Kevin E. Dayhoff
At 11 P.M., September 27, Maryland State Police Medevac helicopter Trooper 2 left its hangar at the Andrews Air Force Base to preserve the “Golden Hour” for two traffic crash victims in Waldorf.

Colorado: Land of Paradox
Tom McLaughlin
The election seems to hinge on battleground states and I visited one of them recently. A trip to Colorado Springs, called “The Springs” by locals, proved to be an enlightening experience.

Tuesday, October 7, 2008

The Republic In Danger
Roy Meachum
With the core of the nation's financial structure in shambles, at stake these next four weeks is the very governmental system itself. Never have these United States needed strong leadership more.


Monday, October 6, 2008
The People’s Will Not Done
Steven R. Berryman
The People to the government: “A lack of planning on your part does not constitute an emergency on my part!” Or does it?

From the Desk of The Publisher:
John W. Ashbury
Over the weekend Frederick City Alderman C. Paul Smith submitted an emailed letter to the chairman of the Republican State Central Committee regarding the decision by Delegate Rick Weldon to change his voting registration from Republican to “Unaffiliated.” Alderman Smith suggests that the Central Committee take a strong stand to have Delegate Weldon removed as chairman of the Frederick County Delegation to the General Assembly. We reprint Alderman Smith’s letter in its entirety.


Friday, October 3, 2008

It’s All Male Bovine Dung
John W. Ashbury
This political season has given new meaning to the term used in the headline above. Both presidential camps have stooped to new lows with their ads, intentionally misrepresenting their opponent’s positions. Unfortunately, all too many American swallow the messages and believe one or the other.

Independent Rick Weldon
Roy Meachum
The only times fellow TheTentacle.com columnist Rick Weldon and I disagreed were when he stepped in the mud pie of partisan politics. Didn't happen often. He was not the sort of human being to give up reason for the sake of one party or the other. Especially in Maryland.


Congress and The Rattlesnake – Part 3
Kevin E. Dayhoff
On May 13, 2008, Democratic presidential nominee Barack Obama compared the current housing crisis in the U.S. to the Great Depression in a campaign stop in Missouri.


Thursday, October 2, 2008
Unfettered Capitalism = Disaster
Tony Soltero
One of the mantras of the right is that free markets only function properly in the complete absence of government intervention. Deregulate everything, get out of the way, and let the market work its magic. It's as essential to conservative dogma as war fever and religious fundamentalism.


Pork and Power
Patricia A. Kelly
I was listening to Senator Orrin Hatch the other day on television, when, referring to the financial bailout vote, he said, “We’re just going to have to sweeten it, and then they’ll vote for it.”

Legally Blonde – The Musical
Roy Meachum
Tuesday's opening at the Hippodrome Theatre brings to Baltimore a show that's still running, if not so strong on Broadway. A cast member's father confided the two-week closing notice has gone up on the New York hit. Pity! But out in the hinterland we have this wow! touring company with us.

Congress and The Rattlesnake – Part 2
Kevin E. Dayhoff
For several weeks the nation and the world have been watching the financial news emanating from Washington and Wall Street with that “deer in headlights” look as everyone holds their breath in disbelief and worries another shoe will drop.


Wednesday, October 1, 2008

From the Desk of The Publisher
John W. Ashbury
Yesterday Delegate Rick Weldon announced that he has changed his voter registration from "Republican" to "Unaffiliated." The text of his announcement is presented here for your edification.

Congress and the Rattlesnake – Part 1
Kevin E. Dayhoff
In response to the increasing wrath of the American voter, the U.S. House of Representatives came to its senses on Monday and voted 288 to 205 to kill the rash and ill-conceived proposed $700 billion bailout of Wall Street.

Two Faces
Tom McLaughlin
I was really surprised how much Sen. John McCain reminded me of Dad. I watched him in the first debate and his mannerisms, coupled with his speech patterns, had Dad written all over him.

20081010 This week in The Tentacle

Chairman Ben S. Bernanke At the National Association for Business Economics 50th Annual Meeting, Washington, D.C.

Chairman Ben S. Bernanke At the National Association for Business Economics 50th Annual Meeting, Washington, D.C.

Related: Speech - Chairman Ben S. Bernanke At the Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition, Chicago, Illinois

October 7, 2008

Current Economic and Financial Conditions

http://www.federalreserve.gov/newsevents/speech/bernanke20081007a.htm

Good afternoon. I am pleased to have once again the opportunity to address the National Association for Business Economics. My remarks today will focus on recent developments in the financial sector and the economy and on the challenges we face.

As you know, financial systems in the United States and in much of the rest of the world are under extraordinary stress, particularly the credit and money markets. The losses suffered by many banks and nonbank financial firms have both constrained their ability to lend and reduced the willingness of other market participants to deal with them. Great uncertainty about the values of financial assets, particularly more complex and opaque assets, has made investors extremely reluctant to bear credit risk, resulting in further declines in asset prices and a drying up of liquidity in a number of funding markets. Even secured funding has become expensive and difficult to obtain, as lenders worry about their ability to sell collateral in illiquid markets in the event of default. In addition, many securitization markets, such as the secondary market for private-label mortgage-backed securities, remain closed or impaired.

Considerable experience in both industrialized and emerging economies has shown that severe financial instability, together with the associated declines in asset prices and disruptions in credit markets, can take a heavy toll on the broader economy if left unchecked. For this reason, the Federal Reserve, the Treasury, and other agencies are committed to restoring market stability and are working assiduously to ensure that the financial system is able to perform its critical economic functions. Recent actions by the Congress have given the Treasury new tools and resources to address the stressed conditions of our financial markets and institutions. The Federal Reserve has also been granted a new authority, the ability to pay interest on bank reserves, which will allow us to expand our lending as needed to support the system while better managing the federal funds rate. These tools will provide important additional support for the government's efforts to strengthen financial markets and the economy.

Let me briefly review recent financial developments. On the heels of nearly a year of stress in credit markets, investors' and creditors' concerns about funding and credit risks at financial firms intensified over the summer as mortgage-related assets deteriorated further, economic growth slowed, and uncertainty about the economic outlook increased. As investors and creditors lost confidence in the ability of certain firms to meet their obligations, their access to capital markets as well as to short-term funding markets became increasingly impaired and their stock prices fell sharply. Among the companies that experienced this dynamic most forcefully were the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac; the investment bank Lehman Brothers; and the insurance company American International Group (AIG).

The Federal Reserve believes that, whenever possible, such difficulties should be addressed through private-sector arrangements--for example, by raising new equity capital, as many firms have done, by negotiations leading to a merger or acquisition, or by an orderly wind-down. Government assistance should be provided with the greatest reluctance and only when the stability of the financial system, and thus the health of the broader economy, is at risk. In those cases when financial stability is threatened, however, intervention to protect the public interest may well be justified.

Fannie Mae and Freddie Mac present cases in point. The Federal Reserve had long warned about the systemic risks posed by these companies' large portfolios of mortgages and mortgage-backed securities, as well as the problems arising from the conflict between shareholders' objectives and the government's goals for the two firms. Given the scale of losses in their portfolios, raising enough new capital from private investors was infeasible. The firms' size and their government-sponsored status precluded a merger with, or acquisition by, another company. To avoid unacceptably large dislocations in the mortgage markets, the financial sector, and the economy as a whole, the Federal Housing Finance Agency (FHFA) put Fannie and Freddie into conservatorship and the Treasury, drawing on authorities recently granted by the Congress, made financial support available. The Federal Reserve, acting in a consultative role, worked closely with FHFA in evaluating the GSE portfolios and capital positions. Based on the joint findings of the agencies, we supported FHFA's decision to place the companies into conservatorship as necessary and appropriate, given their conditions and systemic importance. The government's actions appear to have stabilized the GSEs, although like virtually all other firms they are experiencing effects of the current crisis. Nonetheless, we already have seen benefits of their stabilization in the form of lower mortgage rates, which should help the housing market.

The difficulties at Lehman and AIG raised somewhat different issues. Like the GSEs, both companies were large and complex and deeply embedded in our financial system. In both cases, as the firms approached default, the Treasury and the Federal Reserve sought private-sector solutions, but none was forthcoming. Attempts to organize a consortium of private firms to purchase or recapitalize Lehman were unsuccessful. With respect to public-sector solutions, we determined that either facilitating a sale of Lehman or maintaining the company as a free-standing entity would have required a very sizable injection of public funds--much larger than in the case of Bear Stearns--and would have involved the assumption by taxpayers of billions of dollars of expected losses. Even if assuming these costs could be justified on public policy grounds, neither the Treasury nor the Federal Reserve had the authority to commit public money in that way; in particular, the Federal Reserve's loans must be sufficiently secured to provide reasonable assurance that the loan will be fully repaid. Such collateral was not available in this case. Recognizing that Lehman's potential failure posed risks to market functioning, the Federal Reserve sought to cushion the effects by implementing a number of measures, including substantially broadening the collateral accepted by the Fed's Primary Dealer Credit Facility (PDCF) and Term Securities Lending Facility (TSLF) to ensure that the remaining primary dealers would have uninterrupted access to funding.

In the case of AIG, the Federal Reserve and the Treasury judged that a disorderly failure of AIG would have severely threatened global financial stability and the performance of the U.S. economy. That judgment reflected our assessment of prevailing market conditions, AIG's central role in a number of markets other firms use to manage risks, and the size and composition of AIG's balance sheet. To avoid the default of AIG, the Federal Reserve was able to provide emergency credit that was judged to be adequately secured by the assets of the company. To protect U.S. taxpayers and to mitigate the possibility that lending to AIG would encourage inappropriate risk-taking by financial firms in the future, the Federal Reserve further ensured that the terms of the credit extended to AIG imposed significant costs and constraints on the firm's owners, managers, and creditors.

AIG's difficulties and Lehman's failure, along with growing concerns about the U.S. housing sector and economy, contributed to extraordinarily turbulent conditions in global financial markets in recent weeks. Equity prices have fallen sharply, the cost of short-term credit, where such credit has been available, has spiked, and liquidity has dried up in many markets. One money market fund's losses forced it to "break the buck"--that is, the value of its assets fell below par--an event that triggered extensive withdrawals from a number of money market funds. Those funds responded to the surge in redemptions by attempting to reduce their holdings of commercial paper and large certificates of deposit issued by banks. Some firms that could not roll over maturing commercial paper drew on back-up lines of credit with banks just as the banks were finding it even more difficult to raise cash in the money markets. At the same time, a marked increase in the demand for safe assets--a flight to quality and liquidity--resulted in a further drop in the value of mortgage-related assets and sent the yield on Treasury bills down to a few hundredths of a percent.

Developments during the summer pressured not only nonbank financial firms, but also a number of depository institutions, including Washington Mutual (WaMu) and Wachovia. In recent weeks, these two institutions suffered deposit outflows and reduced access to wholesale funding. The Office of Thrift Supervision, WaMu's regulator, closed that company and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver; the FDIC immediately sold the institution to JPMorgan Chase. In the case of Wachovia, to avoid serious adverse effects on economic conditions and financial stability, the Secretary of the Treasury, in consultation with the President and on the recommendation of the Federal Reserve and FDIC, authorized the FDIC to use its funds to facilitate the sale of that company's banking operations without loss to creditors. Both Citicorp and Wells Fargo have offered to buy the company and negotiations are continuing. Most importantly, however, in either case all depositors and creditors of Wachovia are fully protected, and depositors and other customers will experience no interruption in banking services.

By potentially restricting future flows of credit to households and businesses, the developments in financial markets pose a significant threat to economic growth. The Treasury and the Fed have taken a range of actions to address the very tight funding conditions that now prevail. For example, the Treasury implemented a temporary guarantee program for balances held in money market mutual funds, helping to stem the outflows from these funds and thus reducing their need to sell assets into already distressed markets. The Federal Reserve has taken a number of steps, including putting in place a temporary lending facility that provides financing for banks to purchase high-quality asset-backed commercial paper from money market funds. The Fed has also significantly increased the quantity of funds it auctions to banks and has accommodated heightened demands for funding from banks and primary dealers; as of last Wednesday, our various lending facilities, including our securities lending program, were providing more than $800 billion of liquidity to the financial system. To address dollar funding pressures worldwide, we have significantly expanded reciprocal currency arrangements (so-called swap agreements) with foreign central banks. These agreements enable the foreign central banks to provide dollar funding to financial institutions in their jurisdictions, which helps to improve the functioning of dollar funding markets globally. In addition, this morning the Federal Reserve announced a new facility that will help provide liquidity to term funding markets by purchasing three-month commercial paper and asset-backed commercial paper directly from eligible issuers.

The expansion of Federal Reserve lending is helping financial firms cope with reduced access to their usual sources of funding. Recently, however, our liquidity provision had begun to run ahead of our ability to absorb excess reserves held by the banking system, leading the effective funds rate, on many days, to fall below the target set by the Federal Open Market Committee. This problem has largely been addressed by a provision of the legislation the Congress passed last week, which gives the Federal Reserve the authority to pay interest on balances that depository institutions hold in their accounts at the Federal Reserve Banks. The Federal Reserve announced yesterday that it will pay interest on required reserve balances at 10 basis points below the target federal funds rate, and pay interest on excess reserves, initially at 75 basis points below the target. Paying interest on reserves should allow us to better control the federal funds rate, as banks are unlikely to lend overnight balances at a rate lower than they can receive from the Fed; thus, the payment of interest on reserves should set a floor for the funds rate over the day. With this step, our lending facilities may be more easily expanded as necessary. So long as financial conditions warrant, we will continue to look for ways to reduce funding pressures in key markets.

Economic activity had shown signs of decelerating even before the recent upsurge in financial-market tensions. As has been the case for some time, the housing market continues to be a primary source of weakness in the real economy as well as in the financial markets. However, the slowdown in economic activity has spread outside the housing sector. Private payrolls have continued to contract, and the declines in employment, together with earlier increases in food and energy prices, have eroded the purchasing power of households. This sluggishness of real incomes, together with tighter credit and declining household wealth, is now showing through more clearly to consumer spending. Indeed, since May, real consumer outlays have contracted significantly. Meanwhile, in the business sector, worsening sales prospects and a heightened sense of uncertainty have begun to weigh more heavily on investment spending as well.

The intensification of financial turmoil and the further impairment of the functioning of credit markets seem likely to increase the restraint on economic activity in the period ahead. Even households with good credit histories are now facing difficulties obtaining mortgage loans or home equity lines of credit. Banks are also reducing credit card limits, and denial rates on automobile loan applications reportedly are rising. Businesses, too, are confronting diminished access to credit. For example, disruptions in the commercial paper market and tightening of bank lending standards have made it more difficult for businesses to obtain the working capital they need to meet everyday operating expenses such as payrolls and inventories.

All told, economic activity is likely to be subdued during the remainder of this year and into next year. The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth. To support growth and reduce the downside risks, continued efforts to stabilize the financial markets are essential. The Federal Reserve will continue to use the tools at its disposal to improve market functioning and liquidity.

Inflation has been elevated, reflecting the steep increases in the prices of oil, other commodities, and imports that occurred earlier this year, as well as some pass-through by firms to consumers of their higher costs of production. However, more recently, the prices of oil and other commodities, while remaining quite volatile, have fallen from their peaks, and prices of imports show signs of decelerating. In addition, expected inflation, as measured by consumer surveys and inflation-indexed Treasury securities, has held steady or eased. These recent developments, together with economic activity that is likely to fall short of potential for a time, should lead to rates of inflation more consistent with price stability. Still, the inflation outlook remains highly uncertain, in part because of the extraordinary volatility of commodity prices. We will need to continue to monitor price developments closely.

Overall, the combination of the incoming data and recent financial developments suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased. At the same time, the outlook for inflation has improved somewhat, though it remains uncertain. In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate.

The intensification of the financial crisis in recent weeks made clear that a more powerful and comprehensive approach involving the fiscal authorities was needed to solve these problems. On that basis, the Secretary of the Treasury, with the support of the Federal Reserve, went to the Congress to ask for a substantial program aimed at stabilizing our financial markets. As you know, last week the Congress passed and the President signed the Emergency Economic Stabilization Act. This legislation provides important new tools for addressing the distress in financial markets and thus mitigating the risks to the economy. The act adds broad, flexible authorities to buy troubled assets, to provide guarantees, and to directly strengthen the balance sheets of individual institutions. Notably, the legislation establishes a new Troubled Asset Relief Program, or TARP, under which the Treasury is authorized to purchase as much as $700billion of troubled mortgages, mortgage-related securities, and other financial instruments from financial firms that are regulated under U.S. law and have significant operations in the United States. The act also raises the limit on deposit insurance at banks and credit unions from $100,000 to $250,000 per account, a step that should reinforce depositors' confidence in the security of their funds and thus help to stabilize depository institutions. And, as I mentioned, the act provides the Federal Reserve the authority to pay interest on reserves, which will allow us to better manage the federal funds rate as we provide liquidity to the markets. We will begin exercising that authority this week.

The TARP's purchases of illiquid assets from banks and other financial institutions will create liquidity and promote price discovery in the markets for these assets. This in turn will reduce investor uncertainty about the current value and prospects of financial institutions, enabling banks and other institutions to raise capital and increasing the willingness of counterparties to engage. More generally, increased liquidity and transparency in pricing will help to restore confidence in our financial markets and promote more normal functioning. With time, strengthening our financial institutions and markets will allow credit to begin flowing again, supporting economic growth.

The interests of taxpayers are carefully protected under this program. First, the Congress has required extensive controls and oversight to ensure that the allotted funds are used appropriately and effectively. Second, the $700 billion allocated by the legislation is not an authorization to spend but rather an authorization to purchase financial assets. The Treasury will be a patient investor and will likely hold these assets for an appreciable period of time. Eventually, however, some assets will mature, and the Treasury will choose to sell others to private investors. Financially, in the long run, the taxpayer may come out either ahead or behind in this process; in light of the many uncertainties, no assurances can be given. But the ultimate cost of the program to the taxpayer will certainly be far less than $700 billion. Third, and most important, restoring the normal flow of credit is essential for economic recovery. If the TARP promotes financial stability, leading ultimately to stronger economic growth and job creation, it will have proved a very good investment indeed, to everyone's benefit.

To be sure, there are many challenges associated with the design and implementation of the TARP, including determining which assets will be purchased and how prices will be determined. The Treasury, with the advice and cooperation of the Federal Reserve, is working to address these challenges as quickly as possible. It is unlikely that a single method will be used for acquiring assets; inevitably, some experimentation will be necessary to determine which approaches are most effective. Importantly, the legislation that created the TARP does provide sufficient flexibility to allow for different approaches to solving the problem--subject, of course, to the close oversight that will ensure that the program's funds are used in ways that are in the interest of taxpayers.

These are momentous steps, but they are being taken to address a problem of historic dimensions. In one respect, however, we are fortunate. We have learned from historical experience with severe financial crises that if government intervention comes only at a point at which many or most financial institutions are insolvent or nearly so, the costs of restoring the system are greatly increased. This is not the situation we face today. The Congress and the Administration chose to act at a moment of great stress, but one at which the great majority of financial institutions have sufficient capital and liquidity to return to their critical function of providing new credit for our economy. The steps being taken now to restore confidence in our institutions and markets will go far to resolving the current dislocations in the markets. I believe that the bold actions taken by the Congress, the Treasury, the Federal Reserve, and other agencies, together with the natural recuperative powers of the financial markets, will lay the groundwork for financial and economic recovery.