NewGeography.com blogs

Treasury Secretary Tim Geithner is on the cover of the April 2009 issue of Bloomberg Markets magazine. In the lead article, “Man in the Middle,” the authors refer to his time at the New York Federal Reserve Bank (FRB) as “experience as a consensus builder.” This overlooks the fact that it was easy for him to get everyone to agree, to build group solidarity, when he simply gave the banks and broker-dealers everything they wanted.

The Primary Dealers, those broker-dealers and banks who have a special arrangement with the FRB for trading in treasury securities, agreed when Geithner let them fail to deliver $2.5 trillion of treasury securities for seven weeks in the fall; they agreed when he let them fail to deliver more than $1 trillion two years earlier; they agreed when he let them fail to deliver treasury securities even after Geithner’s own economists told him it was dangerous. By the way, last year the New York FRB’s public information department prevented those economists from speaking on the record about that research with a Bloomberg reporter.

Now, at a hearing on March 24, 2009 before the House Financial Services Committee, Secretary Geithner and Federal Reserve Chairman Ben Bernanke lectured us on the awesome responsibilities of Treasury and Federal Reserve in the current crisis – without admitting that they had those same responsibilities while the crisis was being created.

In a joint statement from the Department of the Treasury and the Federal Reserve they offer no explanation for their failure to fulfill their “central role … in preventing and managing financial crises.” Rather, they use the fact of that role to require that we accept whatever plan they put before us today as the best and wisest course. To convince us that their plan is the right one, they can all point to the fact that the stock markets rallied (gaining nearly 7% across the board) led by the shares of financial institutions (Goldman Sachs’ shares went from $97.48 on Friday night to $111.93 on Monday – a gain of about 15%).

I criticized the “Public Private Partnership” when it was announced in February 2009. Calling Wall Street’s bad investments “Legacy Assets” doesn’t change the fact that they are “junk.” They could call it “the hair of the dog” because they now want to invest taxpayer money into the same junk investments that started the financial snow ball rolling in the first place.

Just because the stock market rallied doesn’t make this “consensus building” – I call it being Wall Street’s lapdog.

While San Francisco Mayor Gavin Newsom was recently chided for his water bottle usage, the city of Los Angeles hasn’t been much better.

It was recently reported that the city of LA spent $184,736 on bottled water in 2008, “despite a mayoral directive that it should not be provided at the city’s expense.”

City officials are encouraged to use coolers or pitchers of tap water for special events, and those that wish to drink bottled water “can do so at their own expense,” said City Controller Laura Chick.

Despite a 2005 memo for Mayor Antonio Villaraigosa stating that city funds were not to be used on bottled water, certain city departments continued to spend funds on the plastic bottles.

The biggest spenders were found to be Public Works ($69,696), Los Angeles World Airports ($31,429), Los Angeles Police Department ($19,708), General Services ($19,508), Transportation ($14,595), and Harbor ($11,993).

The Department of Water and Power cut their spending down from $31,160 in 2004/05 to $3,419 in 2008, while the departments of Community Development, Commission on Children Youth and Families, Fire, Housing, Library, Neighborhood Empowerment, and Personnel ceased purchases altogether.

Although spending has been reduced, public employees continue to expect the city to foot the bill for their bottled water. Such blatant non-compliance is hard to swallow.

The next official Census isn’t till 2010, but Election Data Services is already predicting considerable impacts on Congressional representation.

Things will be getting bigger in Texas, with four added seats, as well as Arizona, with two. Six states—Florida, Georgia, Nevada, Oregon, South Carolina, and Utah—will increase their federal delegations by one district each.

On the opposite end, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, and Pennsylvania will all relinquish one seat, with Ohio appearing to lose two.

While the redistricting process is in the distant future, it should prove interesting to see how the 2010 Census will change the seating arrangement in Washington.

Bloomberg.com reporters Mark Pittman and Bob Ivry are reporting a running total of the money the U.S. government has pledged and spent for bailouts and economic stimulus payments. The total disbursed through February 24, 2009 stands at $3.8 trillion; the total commitment is $11.6 trillion. The Federal Reserve is providing the largest share at $7.6 billion, followed by the U.S. Treasury $2.2 trillion and FDIC $1.6 trillion. The Department of Housing and Urban Development (HUD) and support for Fannie Mae and Freddie Mac, combined with purchases of student loans – bailout money that comes closest to directly bailing out Main Street – total only $760 billion – less than 7 percent of the total.

The national debt currently stands at $10.8 trillion — versus an authorized limit of $12.1 trillion.

Last week, U.S. Treasury Secretary Timothy Geithner got into a tiff with the rest of the world (denied by President Obama) by telling them that they should spend at least 2 percent of their GDP on their own stimulus packages.

The U.S. commitment of $11.6 trillion equals 81 percent of U.S. 2008 gross domestic product (GDP). The $787 billion fiscal stimulus is 5.4 percent of GDP. Just the two-thirds of the stimulus that represents new spending (one-third is tax cuts) is 3.6 percent of GDP. Here’s what financial institutions in various countries got from U.S. taxpayers by way of the AIG bailout:

In about a year, the next U.S. Census will be upon us. However, one group participating in the survey is already driving some lawmakers nuts.

In February, The Association of Community Organizations for Reform Now (ACORN) signed a partnership with the Census Bureau to “assist with the recruitment of the 1.4 million temporary workers needed to go door-to-door to count every person in the United States.”

While the bureau currently has partnerships with more than 250 national organizations from the NAACP to TARGET, ACORN’s past allegations of fraud have raised the most concern.

The organization – a non-partisan group of low-and moderate-income people – came under fire in 2007, when several paid employees were alleged to have created more than 1,700 fraudulent voter registrations. In 2008, another worker in Pennsylvania was sentenced for creating 29 phony registration forms.

The census is used to “determine distribution of taxpayer money through grants and appropriations and the appointment of the 435 seats in the House of Representatives” and lawmakers do not want any fraudulent computing.

Spokespeople for both ACORN and the Census Bureau have refuted any suggestion that “any group will fraudulently and unduly influence the results of the census.”

Though doubts still remain, the bureau is now focusing on the more than 1 million applicants for 140,000 census taker positions, which is where assistance from organizations such as ACORN becomes needed.

Government accountability is under attack – as it was during the Bush administration, so shall it be under Obama. Given ACORN’s past reputation, confidence in the census itself could come up for question.