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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: longnshort who wrote (33514)	3/2/2009 6:46:20 PM
From: Peter Dierks	Respond to of 71588

Trade Nominee Ron Kirk Agrees to Pay Back Taxes MARCH 2, 2009, 5:04 P.M. ET By TOM BARKLEY WASHINGTON -- U.S. Trade Representative nominee Ron Kirk has agreed to pay nearly $10,000 in back taxes owed due to errors in tax returns he filed from 2005 to 2007, the Senate Finance Committee disclosed Monday. Mr. Kirk, a former Mayor of Dallas, amended tax returns after errors were discovered during the committee's vetting process. Tax issues derailed the nomination of former Senate Majority Leader Tom Daschle as Health Secretary. Treasury Secretary Timothy Geithner and Labor Secretary Hilda Solis also faced questions about tax issues prior to their confirmations -- in Ms. Solis' case the issues were with her husband's business. But Finance Committee Chairman Sen. Max Baucus (D., Mont.) said Monday he believes Mr. Kirk is the "right person" to bring about a more balanced trade agenda. Mr. Kirk's confirmation hearing is scheduled for next Monday. The business community has been supportive of Mr. Kirk, who is considered a free-trade advocate. Separately, the U.S. Trade Representative's office said Monday that President Barack Obama would seek to rework the North American Free Trade Agreement and consider changes to pending free trade agreements with Colombia and South Korea. In the report, the administration reaffirmed Mr. Obama's campaign pledges to push Canada and Mexico to agree to stronger worker and environmental protections in NAFTA "without having an adverse effect on trade." The USTR said the U.S. would approach the touchy issue, which during the campaign drew sharp rebukes from U.S. business groups as well as the Canadian and Mexican governments, "in a collaborative spirit." The USTR report signaled a shift from the Bush administration's primary focus on expanding free trade agreements, giving greater emphasis to protecting workers rights and the environment. But the report lacked detail on proposed policy changes. "If we work together, free and fair trade with a proper regard for social and environmental goals and appropriate political accountability will be a powerful contributor to the national and global well being," the report said. Since taking office, Mr. Obama has brought up his intentions to revisit the 1994 NAFTA pact with both of his counterparts. He said during a trip to Canada last month that it is important to avoid stoking protectionist sentiment. Canadian Prime Minister Stephen Harper expressed concern about "unraveling" the complex pact in a joint appearance. Mr. Obama stressed the need to incorporate the environmental and labor provisions into the core part of the agreement without being "disruptive." Mr. Obama has also had to conduct damage control with Canada and other major trade partners over a "Buy American" provision in the recently passed stimulus package that requires stimulus-related infrastructure projects to use U.S.-made products. Under pressure from the administration, a clause was added to ensure that the legislation complies with U.S. trade obligations. The report said the stimulus package showed a commitment to comply with international trade rules. Meanwhile, the USTR said the administration plans "extensive outreach and discourse with the public" to determine whether three trade pacts negotiated by the Bush Administration with Colombia, Korea and Panama are in the best interests of the U.S. and its trading partners. The USTR said it hopes Congress can move on the Panama deal "relatively quickly." But the USTR report calls for setting up "benchmarks" for progress on the other two. During the campaign, Obama echoed his party's concerns about violence against union leaders in Colombia in opposing that trade pact, as well as in calling for greater access for U.S. automakers in the South Korea agreement. Regarding the long-stalled Doha round of global trade talks, the report said the new administration remains committed to a successful completion, but called for additional concessions by other countries. "It will be necessary to correct the imbalance in the current negotiations in which the value of what the United States would be expected to give is well-known and easily calculable, whereas the broad flexibilities available to others leaves unclear the value of new opportunities for our workers, farmers, ranchers, and businesses," it said. Write to Tom Barkley at tom.barkley@dowjones.com online.wsj.com Obama's plan to collect back taxes continues to work. He continues to offer appointments to the scummiest democrats and tax cheats.

To: longnshort who wrote (33514)	3/27/2009 2:43:57 PM
From: Peter Dierks	2 Recommendations Respond to of 71588

Geithner Is Overreaching on Regulatory Power We don't need more politics in our economics. MARCH 27, 2009, 12:37 A.M. ET By FRANCIS X. DIEBOLD and DAVID A. SKEEL JR. One of the main proposals in the regulatory reforms outlined by Treasury Secretary Timothy Geithner yesterday would give the Treasury, FDIC and the Fed authority to take control when investment banks or other financial institutions (hedge funds, etc.) appear troubled, just as the FDIC presently does with deposit-taking banks. The proposal is being offered as a clever political solution to the turf war that might have erupted if the Treasury or FDIC alone were given this quasi-nationalization authority, with no input from the Fed. But the real issue is whether this expansion of regulators' powers is wise. It isn't. Start with the FDIC's performance in practice. One would suspect that the government might not be a shrewd player in the banking business, and recent events confirm that suspicion. IndyMac, for example, was not taken over by the FDIC until long after it was obvious that it should be closed, and current estimates of the cost to taxpayers approach $10 billion. Shortly after the IndyMac failure, moreover, the FDIC brokered a deal to sell Wachovia to Citigroup at a lowball price and wound up with egg on its face when Wells Fargo emerged with a vastly superior offer. We could continue. There's also significant room for principled skepticism based on economics and law. Indeed, the case for broadening regulators' oversight to include investment banks and other financial institutions is based on three flawed assumptions. The first is that the same factors that justify expansive powers to close banks and take control of their assets are equally applicable to investment banks and other financial institutions. But the FDIC's interest in commercial banks is unique -- because it guarantees deposits up to $250,000, the FDIC is a bank's most important creditor and has a stake in its health as the representative of American taxpayers. The government's stake and the need to assure that depositors do not lose access to their deposits, even temporarily, arguably justify the FDIC's extraordinary powers. Those factors are not present with investment banks or other financial institutions. The second flawed assumption is that our bankruptcy laws are not adequate for handling defaults by investment banks or other financial institutions. The Lehman Brothers bankruptcy, which created turmoil in credit markets, is often offered as irrefutable evidence. But the conventional wisdom is based on a serious misreading of the Lehman collapse. The Lehman bankruptcy was so destructive because the Fed and Treasury had strongly suggested they would bail out any large troubled investment bank, as they did with Bear Stearns. Regulators' sudden shift in policy took Lehman and its potential buyers completely by surprise. If the government had instead made clear that it did not intend to rescue troubled investment banks, Lehman surely would have taken steps to prepare for the possibility of bankruptcy. Lehman and its buyers would not have played chicken with the Fed and Treasury as they did, holding out for a government guarantee of the sales of Lehman's assets. Nevertheless, the Lehman bankruptcy ultimately proceeded quite smoothly. Contrary to the widespread myth that bankruptcy is time-consuming and ineffectual, Lehman sold its major brokerage assets to Barclays less than a week after filing for bankruptcy. It is now in the process of selling its tens of billions of dollars of less time-sensitive assets at a more deliberate pace. Lawmakers should take a second look at Lehman as they decide what to do with AIG. The third flawed assumption is that financial firms flirting with distress are somehow worse decision makers than federal regulators. But the opposite is likely true. If the Treasury, FDIC and Fed had authority over investment bank failures, troubled banks would have a strong incentive to negotiate for rescue loans, and their pleas would be heard by regulators influenced as much by political as financial factors. The involvement of three different regulators (and mandatory consultation with the president) would magnify this risk. With bankruptcy, in contrast, the decision of whether and when to file is made by an institution's managers and creditors, who have the best information and their own money on the line. Extending the FDIC's authority, in conjunction with Treasury and the Fed, to include investment banks and other financial institutions is being sold as a small and pragmatic step. In reality it is a big step, and that big step would be a big mistake. Mr. Diebold is a professor of economics, finance and statistics, and co-director of the Wharton Financial Institutions Center, at the University of Pennsylvania. Mr. Skeel is a professor of law at the University of Pennsylvania. online.wsj.com