How Obama can reset his presidency
By Clive Crook
Copyright The Financial Times Limited 2010
Published: January 24 2010 20:25 | Last updated: January 24 2010 20:25
http://www.ft.com/cms/s/0/5e086c1e-0925-11df-ba88-00144feabdc0.html?nclick_check=1
One year into his presidency, Barack Obama has come to a defining moment. He needs to reset, and Wednesday’s state of the union address is the place to begin.
Scott Brown’s election in Massachusetts was an astonishing rebuke. It is difficult, still, to take in: one of the most liberal states in the union sent a conservative Republican to succeed Edward Kennedy in the Senate. A few weeks before, this was scarcely imaginable, even allowing for the Democratic candidate’s impressive incompetence.
For Mr Obama to carry on as though nothing had happened would be a gross mistake. But overreacting would be as bad. Going populist in a way that is false to his character would be one such error. Abandoning his ambitions for his presidency, occupying the office with no purpose except to keep it, would be another.
The Obama presidency is not dead yet. The midterm elections are 10 months away, and a lot can happen. If the economy revives, voters will come round. Mr Obama can still recover – but he must show he understands what has gone wrong. Early signs are that he does not.
He says that the same force which put him in the White House carried Mr Brown to victory: anger and frustration, “not just because of what’s happened in the last year or two years, but what’s happened over the last eight years”. In other words, the blame for the election of a Republican in Massachusetts rests with George W. Bush. This was laughable. Worse, it suggested Mr Obama saw no need to change.
Of course, even while blaming Mr Bush for Massachusetts, the president did alter his approach – in a bad way, by pivoting towards a more populist economic policy. His new proposals on bank regulation are largely irrelevant, in my view, but for the moment put substance to one side and consider the tone. The tone, after all, was the point. Suddenly Mr Obama is a zealous bank-basher, spoiling for a fight and channelling the “bring it on” machismo of his predecessor. Much as Americans are furious at the banks, leftist populism is a long-term losing strategy in a country that turns out to be more conservative than Democrats had supposed.
Worse, on this president, the brawling posture looks false. This is not the “No Drama Obama” the US elected and – an important thing to bear in mind – still likes. A new poll shows that clear majorities still find Mr Obama “easygoing and likeable”, and “inspirational and exciting”; nearly 60 per cent praise his “leadership qualities”. Voters rate him lower, however, on job performance. They have it exactly right. Mr Obama had, and despite everything still has, plenty of political capital. But he has spent the past year trying in vain to hoard it. In 2010, the watchword will be: “Use it or lose it.”
What the middle of the electorate wanted from Mr Obama was, above all, a change in the way Washington works – and that was exactly what he promised. Congress is cordially loathed by a solid majority of US voters. They see Capitol Hill as intent on its own feuds and perquisites rather than on serving the public interest. They see both houses locked in a semi-permanent state of thrashing incapacity, interrupted by moments of frightening excess as one side or the other gets the upper hand. This is the dysfunction Mr Obama promised to address, and voters believed him.
Swing voters prize bipartisanship not just because it implies more centrist policies, but also because it checks zeal with pragmatism. Mr Obama seemed to embody that preference. It was plausible to hope that, while not dictating every detail of policies such as healthcare, he would insist both sides were heard.
What did he then do? He outsourced political leadership to Nancy Pelosi in the House of Representatives and Harry Reid in the Senate – leaders determined to press home their advantage and shut out the Republican enemy.
On healthcare reform, Mr Obama simply stood aside, telling the Democratic majorities that he would sign whatever they came up with. Efforts at outreach to Republicans were perfunctory. The moderating influence on the bills came not from them, or from the White House, but from dissenting conservative Democrats, fearing an electoral backlash. Deal-making to secure their support was as squalid as ever, with billions of dollars to be spent on bribes for their states.
Despite all that, the Senate bill was worth passing. But the process was revolting: congressional sausage-making at its worst. The public recoiled in disgust and confusion, while Mr Obama looked on placidly. This is the dynamic that accounts for the flight of independents from Mr Obama, and for the rout in Massachusetts.
It is not too late for healthcare reform, or for this administration. Mr Obama does not need a personality change, or a new ideology. But he does need to remember that he is the president of all Americans, not the passive facilitator of the Democratic party in Congress.
He must start leading. He must stop apologising to the progressive left, and find partners in the centre and the moderate right. With luck, the Republicans’ 41st seat in the Senate will force him to do this – but he should never have needed forcing. Yes, Republicans scenting victory will try to rebuff him. But if Mr Obama makes his efforts persistent enough and public enough, he can make them pay a price for that. The alternative for his party come November, and himself in 2012, could be ugly.
clive.crook@gmail.com
More columns at www.ft.com/clivecrook
Monday, January 25, 2010
Obama should act more like a president than a prime minister
Obama should act more like a president than a prime minister
By Fareed Zakaria
Copyright by The Washington Post
Monday, January 25, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402300.html
A great debate has begun as to how Barack Obama should respond to last week's election results in Massachusetts, which was clearly a protest vote against him, congressional Democrats and their signature policy proposal: the health-care bill. My own advice would be simple: Barack Obama needs to act like a president, especially the president he campaigned to become.
In his enduring treatise, "The American Commonwealth," James Bryce, a British writer who toured the United States in the late 19th century, observed that the Founding Fathers had created a president who would, in a crucial sense, resemble the British king, "not only in being the head of the executive, but in standing apart from and above political parties (italics in the original). He was to represent the nation as a whole. . . . The independence of his position, with nothing either to gain or to fear from Congress, would, it was hoped, leave him free to think only of the welfare of the people."
Obama began his presidency in this vein. In his response to the economic crisis, he steered a clear middle course, refusing to accept the left's cries for bank nationalization but also adopting a far more vigorous and Keynesian approach than the right could accept. In foreign policy, he reset America's image in the world in a manner that earned him kudos from the likes of James Baker and Brent Scowcroft. But that broader, presidential approach was partly set aside in passing the fiscal stimulus and then abandoned altogether in the drive to change the American health-care system.
Over the past six months -- which have correlated with his dramatic drop in the polls -- Obama has behaved less like a president and more like a prime minister. He has not outlined a broad vision for the country. He has not embraced the best solutions -- from left and right -- for the nation's problems. Instead he has behaved as the head of the Democratic Party in Congress, working almost entirely with and through that caucus, slicing and dicing policy proposals to cobble together legislative majorities. He has allowed the great policy program of his presidency to be written and defined by a collection of congressional Democrats, accepting the lopsided bills that emerged and the corruption inherent in the process.
If he represents all the people, Obama should remember that for 85 percent of Americans, the great health-care crisis is about cost. For about 15 percent, it is about extending coverage. Yet his plan does little about the first and focuses mostly on the second. It promotes too little of the real discipline that would force costs down and instead throws in a few ideas, experiments, and pilot programs that could, over time and if rigorously expanded, do so.
Watching the legislative process, Bismarck allegedly observed, is like watching the making of sausages. The health-care bill is particularly sausage-like. It has special exemptions on future costs for five states, exemptions for unions, concessions to almost every special interest in the industry and of course no reform at all of the crazy legal system because the trial-lawyers bar remains untouchable for the Democratic Party.
Defenders argue that Obama has only acted realistically. Focusing too intently on cost reduction would have alienated all the same forces -- insurance companies, Big Pharma -- that derailed health-care reform under Bill Clinton. But the result is one that few can honestly call "reform" and one that has steadily lost public support as it has moved through Congress. In a recent Wall Street Journal poll, Obama fared reasonably well on all attributes of leadership. His lowest scores came when respondents were asked whether they agreed with his proposals, and whether he had changed the way business was done in Washington. In other words, he has moved too far from the center and too close to special interests.
The Republican Party has decided to be utterly uncooperative (although on health care Obama never really reached out to them with serious compromises). But whether or not Republican senators would at first reward Obama for adopting a more nonpartisan approach, independent voters would, which would then change the political calculus in Washington. Rahm Emanuel quipped that the task was not to get health-care legislation through "the executive committee of the Brookings Institution, but the U.S. Congress." In fact, proposals that would impress experts would also impress tens of millions of independents, the vast middle ground where elections are won and lost in America. That is how Bill Clinton outmaneuvered Newt Gingrich, and how Tony Blair outfoxed the Tory party for 10 years.
On health care, energy, taxes, immigration, deficits and everything else, Obama should get away from the politics of legislating and go back to being president. He should put forward the best proposals to help solve America's problems. He may or may not get much support from Republicans, but he will earn political capital and power, which in the long run is the only way to enact a big, transforming agenda. This approach is exactly what Obama campaigned on. He promised that he would reach out to all sections of the country, listen to the best ideas and appeal to the nation as a whole. "I don't see a blue America and a red America, I see only the United States of America," he said. Obama needs to shift course and govern as the president he promised to become. That's change I could believe in.
Fareed Zakaria is editor of Newsweek International. His e-mail address is comments@fareedzakaria.com.
By Fareed Zakaria
Copyright by The Washington Post
Monday, January 25, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402300.html
A great debate has begun as to how Barack Obama should respond to last week's election results in Massachusetts, which was clearly a protest vote against him, congressional Democrats and their signature policy proposal: the health-care bill. My own advice would be simple: Barack Obama needs to act like a president, especially the president he campaigned to become.
In his enduring treatise, "The American Commonwealth," James Bryce, a British writer who toured the United States in the late 19th century, observed that the Founding Fathers had created a president who would, in a crucial sense, resemble the British king, "not only in being the head of the executive, but in standing apart from and above political parties (italics in the original). He was to represent the nation as a whole. . . . The independence of his position, with nothing either to gain or to fear from Congress, would, it was hoped, leave him free to think only of the welfare of the people."
Obama began his presidency in this vein. In his response to the economic crisis, he steered a clear middle course, refusing to accept the left's cries for bank nationalization but also adopting a far more vigorous and Keynesian approach than the right could accept. In foreign policy, he reset America's image in the world in a manner that earned him kudos from the likes of James Baker and Brent Scowcroft. But that broader, presidential approach was partly set aside in passing the fiscal stimulus and then abandoned altogether in the drive to change the American health-care system.
Over the past six months -- which have correlated with his dramatic drop in the polls -- Obama has behaved less like a president and more like a prime minister. He has not outlined a broad vision for the country. He has not embraced the best solutions -- from left and right -- for the nation's problems. Instead he has behaved as the head of the Democratic Party in Congress, working almost entirely with and through that caucus, slicing and dicing policy proposals to cobble together legislative majorities. He has allowed the great policy program of his presidency to be written and defined by a collection of congressional Democrats, accepting the lopsided bills that emerged and the corruption inherent in the process.
If he represents all the people, Obama should remember that for 85 percent of Americans, the great health-care crisis is about cost. For about 15 percent, it is about extending coverage. Yet his plan does little about the first and focuses mostly on the second. It promotes too little of the real discipline that would force costs down and instead throws in a few ideas, experiments, and pilot programs that could, over time and if rigorously expanded, do so.
Watching the legislative process, Bismarck allegedly observed, is like watching the making of sausages. The health-care bill is particularly sausage-like. It has special exemptions on future costs for five states, exemptions for unions, concessions to almost every special interest in the industry and of course no reform at all of the crazy legal system because the trial-lawyers bar remains untouchable for the Democratic Party.
Defenders argue that Obama has only acted realistically. Focusing too intently on cost reduction would have alienated all the same forces -- insurance companies, Big Pharma -- that derailed health-care reform under Bill Clinton. But the result is one that few can honestly call "reform" and one that has steadily lost public support as it has moved through Congress. In a recent Wall Street Journal poll, Obama fared reasonably well on all attributes of leadership. His lowest scores came when respondents were asked whether they agreed with his proposals, and whether he had changed the way business was done in Washington. In other words, he has moved too far from the center and too close to special interests.
The Republican Party has decided to be utterly uncooperative (although on health care Obama never really reached out to them with serious compromises). But whether or not Republican senators would at first reward Obama for adopting a more nonpartisan approach, independent voters would, which would then change the political calculus in Washington. Rahm Emanuel quipped that the task was not to get health-care legislation through "the executive committee of the Brookings Institution, but the U.S. Congress." In fact, proposals that would impress experts would also impress tens of millions of independents, the vast middle ground where elections are won and lost in America. That is how Bill Clinton outmaneuvered Newt Gingrich, and how Tony Blair outfoxed the Tory party for 10 years.
On health care, energy, taxes, immigration, deficits and everything else, Obama should get away from the politics of legislating and go back to being president. He should put forward the best proposals to help solve America's problems. He may or may not get much support from Republicans, but he will earn political capital and power, which in the long run is the only way to enact a big, transforming agenda. This approach is exactly what Obama campaigned on. He promised that he would reach out to all sections of the country, listen to the best ideas and appeal to the nation as a whole. "I don't see a blue America and a red America, I see only the United States of America," he said. Obama needs to shift course and govern as the president he promised to become. That's change I could believe in.
Fareed Zakaria is editor of Newsweek International. His e-mail address is comments@fareedzakaria.com.
Supreme Court ruling calls for a populist revolt
Supreme Court ruling calls for a populist revolt
By E.J. Dionne Jr.
Copyright by The Washington post
Monday, January 25, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402298.html
"Populism" is the most overused and misused word in the lexicon of commentary. But thanks to a reckless decision by Chief Justice John Roberts's Supreme Court and the greed of the nation's financial barons, we have reached a true populist moment in American politics.
The Supreme Court's 5-to-4 decision last week giving American corporations the right to unlimited political spending was an astonishing display of judicial arrogance, overreach and unjustified activism.
Turning its back on a century of practice and decades of precedent, a narrow right-wing majority on the court decided to change the American political system by tilting it decisively in favor of corporate interests.
An unusually blunt headline in Friday's print edition of The New York Times told the story succinctly: "Lobbies' New Power: Cross Us, and Our Cash Will Bury You."
Think of this rather persuasive moment in a chat between a corporate lobbyist and a senator: "Are you going to block that taxpayer bailout we want? Well, I'm really sorry, but we're going to have to run $2 million worth of really vicious ads against you." The same exchange might take place on tax breaks, consumer protections, environmental rules and worker safeguards.
Defenders of this vast expansion of corporate influence piously claim it's about "free speech." But since when is a corporation, a creation of laws passed by governments, entitled to the same rights as an individual citizen? This ruling will give large business entities far more power than any individual, unless you happen to be Michael Bloomberg or Bill Gates.
The only proper response to this distortion of our political system by ideologically driven justices is a popular revolt. It would be a revolt of a sort deeply rooted in the American political tradition. The most vibrant reform alliances in our history have involved coalitions between populists (who stand up for the interests and values of average citizens) and progressives (who fight against corruption in government and for institutional changes to improve the workings of our democracy). It's time for a new populist-progressive alliance.
This court ruling should also challenge the fake populism we have seen of late. It disguises a defense of the interests of the powerful behind crowd-pleasing rhetoric against "Washington," "taxes" and, yes, "Obama."
President Obama has helped feed this faux populist revolt by failing to understand until recently how deeply frustrated politically moderate, middle-class Americans are over policies that bailed out the banks while leaving behind millions of unemployed and millions more alarmed about their economic futures.
If average voters came to see government primarily as an instrument of the banks, why should they believe that the same government could help them on matters of health care and employment? This problem was aggravated by puffed-up, self-involved U.S. senators who conspired to make the legislative process look as ugly and chaotic as possible.
Obama began turning toward populism before the results of the Massachusetts Senate race rolled in. Republican Scott Brown's victory made the new turn imperative.
The president has now offered a modest tax on the big financial institutions to cover the costs of bailouts, and a tougher approach to banks that will limit their size and their capacity to make economy-wrecking financial bets. It's a decent start, and it's about time.
Next will come legislation to turn back the Supreme Court's effort to undermine American democracy. Sen. Charles E. Schumer and Rep. Chris Van Hollen are working with the White House on a measure to rein in the reach of the Supreme Court ruling.
Their bill is still being written, but the ideas they're considering include prohibiting political spending by corporations that receive government money, hire lobbyists or make most of their income abroad.
And shouldn't shareholders have the right to vote before a corporation spends money on politics? Do we want foreign-owned corporations, especially those owned by foreign governments, to exercise an undue influence in our politics? Imagine what an enterprise owned or influenced by the Chinese or Russian governments might try to do to a politician who campaigns too ardently for human rights?
My favorite idea: Requiring chief executives to appear in ads their corporations sponsor, exactly as politicians have to do. ("I'm Joe Smith, the chief executive of Acme Consolidated Megacorporation, and I approve this message.")
President Obama was right to invoke Teddy Roosevelt in his radio address on Saturday. American democracy and the square deal in government for which TR battled are in jeopardy.
ejdionne@washpost.com
By E.J. Dionne Jr.
Copyright by The Washington post
Monday, January 25, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402298.html
"Populism" is the most overused and misused word in the lexicon of commentary. But thanks to a reckless decision by Chief Justice John Roberts's Supreme Court and the greed of the nation's financial barons, we have reached a true populist moment in American politics.
The Supreme Court's 5-to-4 decision last week giving American corporations the right to unlimited political spending was an astonishing display of judicial arrogance, overreach and unjustified activism.
Turning its back on a century of practice and decades of precedent, a narrow right-wing majority on the court decided to change the American political system by tilting it decisively in favor of corporate interests.
An unusually blunt headline in Friday's print edition of The New York Times told the story succinctly: "Lobbies' New Power: Cross Us, and Our Cash Will Bury You."
Think of this rather persuasive moment in a chat between a corporate lobbyist and a senator: "Are you going to block that taxpayer bailout we want? Well, I'm really sorry, but we're going to have to run $2 million worth of really vicious ads against you." The same exchange might take place on tax breaks, consumer protections, environmental rules and worker safeguards.
Defenders of this vast expansion of corporate influence piously claim it's about "free speech." But since when is a corporation, a creation of laws passed by governments, entitled to the same rights as an individual citizen? This ruling will give large business entities far more power than any individual, unless you happen to be Michael Bloomberg or Bill Gates.
The only proper response to this distortion of our political system by ideologically driven justices is a popular revolt. It would be a revolt of a sort deeply rooted in the American political tradition. The most vibrant reform alliances in our history have involved coalitions between populists (who stand up for the interests and values of average citizens) and progressives (who fight against corruption in government and for institutional changes to improve the workings of our democracy). It's time for a new populist-progressive alliance.
This court ruling should also challenge the fake populism we have seen of late. It disguises a defense of the interests of the powerful behind crowd-pleasing rhetoric against "Washington," "taxes" and, yes, "Obama."
President Obama has helped feed this faux populist revolt by failing to understand until recently how deeply frustrated politically moderate, middle-class Americans are over policies that bailed out the banks while leaving behind millions of unemployed and millions more alarmed about their economic futures.
If average voters came to see government primarily as an instrument of the banks, why should they believe that the same government could help them on matters of health care and employment? This problem was aggravated by puffed-up, self-involved U.S. senators who conspired to make the legislative process look as ugly and chaotic as possible.
Obama began turning toward populism before the results of the Massachusetts Senate race rolled in. Republican Scott Brown's victory made the new turn imperative.
The president has now offered a modest tax on the big financial institutions to cover the costs of bailouts, and a tougher approach to banks that will limit their size and their capacity to make economy-wrecking financial bets. It's a decent start, and it's about time.
Next will come legislation to turn back the Supreme Court's effort to undermine American democracy. Sen. Charles E. Schumer and Rep. Chris Van Hollen are working with the White House on a measure to rein in the reach of the Supreme Court ruling.
Their bill is still being written, but the ideas they're considering include prohibiting political spending by corporations that receive government money, hire lobbyists or make most of their income abroad.
And shouldn't shareholders have the right to vote before a corporation spends money on politics? Do we want foreign-owned corporations, especially those owned by foreign governments, to exercise an undue influence in our politics? Imagine what an enterprise owned or influenced by the Chinese or Russian governments might try to do to a politician who campaigns too ardently for human rights?
My favorite idea: Requiring chief executives to appear in ads their corporations sponsor, exactly as politicians have to do. ("I'm Joe Smith, the chief executive of Acme Consolidated Megacorporation, and I approve this message.")
President Obama was right to invoke Teddy Roosevelt in his radio address on Saturday. American democracy and the square deal in government for which TR battled are in jeopardy.
ejdionne@washpost.com
Thursday, January 14, 2010
FDIC chief puts blame on Fed for crisis
FDIC chief puts blame on Fed for crisis
By Tom Braithwaite in Washington
Copyright The Financial Times Limited 2010
Published: January 14 2010 14:59 | Last updated: January 14 2010 14:59
http://www.ft.com/cms/s/0/0a3b97c8-0114-11df-a4cb-00144feabdc0.html
The Federal Deposit Insurance Corporation laid much of the blame for the financial crisis at the door of the Federal Reserve at an inquiry that causes fresh problems for the US central bank.
Sheila Bair, chairman of the FDIC, which insures depositors against bank failures, said on Thursday that the Fed waited seven years to use fully its powers to regulate subprime lending.
“If HOEPA (Home Ownership and Equity Protection Act) regulations had been amended in 2001, instead of in 2008, a large number of the toxic mortgage loans could not have been originated and much of the crisis may have been prevented,” she said.
The typically forthright written testimony from Ms Bair to the second day of the hearings from the new Financial Crisis Inquiry Commission pits one of the most politically powerful regulators against one of the weakest. The Fed is under attack on multiple fronts in Congress with attempts to conduct sweeping audits of the central bank and remove much of its regulatory role.
The FCIC, which on Wednesday heard from four Wall Street executives, also heard from Mary Schapiro, the Securities and Exchange Commission and Eric Holder, the attorney-general.
Ms Bair acknowledged that many regulators had failed in the crisis in a thorough 54-page analysis of the events leading up to the 2008 shocks across the credit and equity markets.
“Regulators were wholly unprepared and ill-equipped for a systemic event that initially destroyed liquidity in the shadow banking system and subsequently spread to the largest firms throughout the financial system,” she said.
Ms Bair has opposed giving the Fed a principal role in regulating systemic risk.
She also reiterated her belief, which goes against the wishes of Tim Geithner, Treasury secretary, that a new “resolution” fund, used to wind up a failing systemically important fund, should be built up before a crisis with a new assessment on the industry.
Banks are already reeling from the news that they will have to pay about $90bn over 10 years in a levy to recoup the government’s costs of bailing out the system.
Finally, Ms Bair concluded with a call for the financial sector to be constrained from outsized growth. “Longer term, we must develop a more strategic approach that utilises all available policy tools — fiscal, monetary, and regulatory — to lead us toward a longer-term, more stable, and more widely shared prosperity,” she said.
By Tom Braithwaite in Washington
Copyright The Financial Times Limited 2010
Published: January 14 2010 14:59 | Last updated: January 14 2010 14:59
http://www.ft.com/cms/s/0/0a3b97c8-0114-11df-a4cb-00144feabdc0.html
The Federal Deposit Insurance Corporation laid much of the blame for the financial crisis at the door of the Federal Reserve at an inquiry that causes fresh problems for the US central bank.
Sheila Bair, chairman of the FDIC, which insures depositors against bank failures, said on Thursday that the Fed waited seven years to use fully its powers to regulate subprime lending.
“If HOEPA (Home Ownership and Equity Protection Act) regulations had been amended in 2001, instead of in 2008, a large number of the toxic mortgage loans could not have been originated and much of the crisis may have been prevented,” she said.
The typically forthright written testimony from Ms Bair to the second day of the hearings from the new Financial Crisis Inquiry Commission pits one of the most politically powerful regulators against one of the weakest. The Fed is under attack on multiple fronts in Congress with attempts to conduct sweeping audits of the central bank and remove much of its regulatory role.
The FCIC, which on Wednesday heard from four Wall Street executives, also heard from Mary Schapiro, the Securities and Exchange Commission and Eric Holder, the attorney-general.
Ms Bair acknowledged that many regulators had failed in the crisis in a thorough 54-page analysis of the events leading up to the 2008 shocks across the credit and equity markets.
“Regulators were wholly unprepared and ill-equipped for a systemic event that initially destroyed liquidity in the shadow banking system and subsequently spread to the largest firms throughout the financial system,” she said.
Ms Bair has opposed giving the Fed a principal role in regulating systemic risk.
She also reiterated her belief, which goes against the wishes of Tim Geithner, Treasury secretary, that a new “resolution” fund, used to wind up a failing systemically important fund, should be built up before a crisis with a new assessment on the industry.
Banks are already reeling from the news that they will have to pay about $90bn over 10 years in a levy to recoup the government’s costs of bailing out the system.
Finally, Ms Bair concluded with a call for the financial sector to be constrained from outsized growth. “Longer term, we must develop a more strategic approach that utilises all available policy tools — fiscal, monetary, and regulatory — to lead us toward a longer-term, more stable, and more widely shared prosperity,” she said.
US retail sales drop in December
US retail sales drop in December
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: January 14 2010 14:39 | Last updated: January 14 2010 17:23
http://www.ft.com/cms/s/0/73957524-010d-11df-a4cb-00144feabdc0.html
US retail sales unexpectedly fell in December, disappointing hopes that consumers had added momentum to the recovery towards the end of last year.
Separately, new jobless claims ticked up last week while business inventories rose last month, raising optimism for greater economic output.
Sales fell by 0.3 per cent last month, the commerce department said on Thursday. That clashed with expectations of Wall Street analysts, who were expecting a rise – November’s sales were revised up to show a 1.8 per cent increase.
Excluding cars, which tend to be volatile, retail sales were off by 0.2 per cent during December. However, compared with a year ago, sales were up by 5.4 per cent.
Last month, sales were strongest at health and personal care stores, sporting goods and hobby shops and furniture stores. Sales were down at clothing and department stores, and at electronics stores.
Retailers have been generally pleased with their holiday sales, which showed a marked improvement from the grim 2008 shopping season. This week, Tiffany, the US jeweller, said its sales jumped 17 per cent in the final two months of last year compared with the same period in the previous year.
According to Retail Metrics, US retailers notched same-store sales gains of 3 per cent in December, the biggest monthly rise since April 2008. Economists said that Thursday’s dip in sales was likely due to deep holiday discounting that suppressed prices.
Meanwhile, labour department figures showed on Thursday that US jobless claims rose by 11,000 to 444,000. That was a bigger increase than economists had anticipated, although the four-week average of new claims fell by 9,000 to 440,750.
The number of Americans continuing to claim unemployment benefits continued to shrink as benefits expired. Continuing claims declined by 211,000 to 4.6m.
“The labour market overall is less bad than it was, in terms of flows, but it is still very sick,” said Ian Shepherdson, chief US economist at High Frequency Economics.
Business inventories, however, have been showing signs of health in recent months as companies have been replenishing their stocks. The 0.4 per cent monthly increase was the second in a row and the 2 per cent rise in sales was the sharpest increase in two years.
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: January 14 2010 14:39 | Last updated: January 14 2010 17:23
http://www.ft.com/cms/s/0/73957524-010d-11df-a4cb-00144feabdc0.html
US retail sales unexpectedly fell in December, disappointing hopes that consumers had added momentum to the recovery towards the end of last year.
Separately, new jobless claims ticked up last week while business inventories rose last month, raising optimism for greater economic output.
Sales fell by 0.3 per cent last month, the commerce department said on Thursday. That clashed with expectations of Wall Street analysts, who were expecting a rise – November’s sales were revised up to show a 1.8 per cent increase.
Excluding cars, which tend to be volatile, retail sales were off by 0.2 per cent during December. However, compared with a year ago, sales were up by 5.4 per cent.
Last month, sales were strongest at health and personal care stores, sporting goods and hobby shops and furniture stores. Sales were down at clothing and department stores, and at electronics stores.
Retailers have been generally pleased with their holiday sales, which showed a marked improvement from the grim 2008 shopping season. This week, Tiffany, the US jeweller, said its sales jumped 17 per cent in the final two months of last year compared with the same period in the previous year.
According to Retail Metrics, US retailers notched same-store sales gains of 3 per cent in December, the biggest monthly rise since April 2008. Economists said that Thursday’s dip in sales was likely due to deep holiday discounting that suppressed prices.
Meanwhile, labour department figures showed on Thursday that US jobless claims rose by 11,000 to 444,000. That was a bigger increase than economists had anticipated, although the four-week average of new claims fell by 9,000 to 440,750.
The number of Americans continuing to claim unemployment benefits continued to shrink as benefits expired. Continuing claims declined by 211,000 to 4.6m.
“The labour market overall is less bad than it was, in terms of flows, but it is still very sick,” said Ian Shepherdson, chief US economist at High Frequency Economics.
Business inventories, however, have been showing signs of health in recent months as companies have been replenishing their stocks. The 0.4 per cent monthly increase was the second in a row and the 2 per cent rise in sales was the sharpest increase in two years.
Iraq Sentences 11 to Death in Ministry Bombings
Iraq Sentences 11 to Death in Ministry Bombings
By NADA BAKRI
Copyright by The New York Times
Published: January 14, 2010
http://www.nytimes.com/2010/01/15/world/middleeast/15iraq.html?ref=global-home
BAGHDAD — A Baghdad court sentenced 11 Iraqis to death on Thursday for planning and carrying out a series of devastating attacks last summer.
The bombings, on Aug. 19, struck Iraq’s Foreign and Finance Ministries in the heart of the capital and embarrassed the government of Prime Minister Nuri Kamal al-Maliki ahead of important parliamentary elections in March. the attacks also came less than two months after American combat troops withdrew from Iraqi cities, raising fears among many Iraqis that their security forces are not capable of maintaining security yet.
Judge Abdul Sattar al-Beeraqdar, a spokesman for Iraq’s Higher Judicial Council, said all 11 defendants were found guilty of financing, planning and participating in the bombings, which killed at least 95 people and wounded hundreds. The men have a month to appeal the sentence, he said.
The bombers, driving large trucks filled with fertilizer and explosives, were able to get close to the heavily guarded ministries in part due to relaxed security that Mr. Maliki’s government had ordered to cast a sense of normality over the city.
Following the attacks, a number of policemen in charge of the area were arrested on charges of negligence.
Iraqi and Western officials expect security to worsen in the weeks leading to the March 7 election.
By NADA BAKRI
Copyright by The New York Times
Published: January 14, 2010
http://www.nytimes.com/2010/01/15/world/middleeast/15iraq.html?ref=global-home
BAGHDAD — A Baghdad court sentenced 11 Iraqis to death on Thursday for planning and carrying out a series of devastating attacks last summer.
The bombings, on Aug. 19, struck Iraq’s Foreign and Finance Ministries in the heart of the capital and embarrassed the government of Prime Minister Nuri Kamal al-Maliki ahead of important parliamentary elections in March. the attacks also came less than two months after American combat troops withdrew from Iraqi cities, raising fears among many Iraqis that their security forces are not capable of maintaining security yet.
Judge Abdul Sattar al-Beeraqdar, a spokesman for Iraq’s Higher Judicial Council, said all 11 defendants were found guilty of financing, planning and participating in the bombings, which killed at least 95 people and wounded hundreds. The men have a month to appeal the sentence, he said.
The bombers, driving large trucks filled with fertilizer and explosives, were able to get close to the heavily guarded ministries in part due to relaxed security that Mr. Maliki’s government had ordered to cast a sense of normality over the city.
Following the attacks, a number of policemen in charge of the area were arrested on charges of negligence.
Iraqi and Western officials expect security to worsen in the weeks leading to the March 7 election.
European Bank Holds Steady on Interest Rates
European Bank Holds Steady on Interest Rates
By JACK EWING
Copyright by The New York Times
Published: January 14, 2010
http://www.nytimes.com/2010/01/15/business/global/15euro.html?ref=global-home
FRANKFURT — The European Central Bank left its benchmark interest rate unchanged at a historic low Thursday, amid signs the region’s economy and banking system are still struggling back to health.
The bank’s president, Jean-Claude Trichet, said that while the region's economy is expanding, “We have a bumpy road ahead of us.” It was possible that economic indicators could be uneven from quarter to quarter, he said at a news conference following a meeting of the bank’s governing council.
The bank, which sets monetary policy for the 16 countries that use the euro, left its benchmark interest rate at 1 percent, where it has been since May. Many analysts do not expect the E.C.B. to begin raising rates until late 2010 or even 2011. Mr. Trichet’s comments Thursday are not likely to change that view.
Mr. Trichet, who was asked repeatedly about Greece’s attempts to tame its soaring budget deficit, indicated that the country cannot expect “special treatment” from the E.C.B. But he also dismissed as “absurd” the suggestion that any country would leave the euro zone.
In December, the central bank’s governing council said it would begin scaling back its huge lending program to euro-zone banks, which has helped avert a collapse in lending to business. Mr. Trichet pointed out Thursday that the European recovery is due in part to stimulus measures. “Some of the factors supporting the growth in real G.D.P. are of a temporary nature,” he said.
European growth, while recovering, remains spotty. Output in Germany, the euro-zone’s largest economy, was close to zero in the fourth quarter, the Economics Ministry said Wednesday.
But the European Union’s statistics office on Thursday reported that euro zone industrial production rose twice as much as expected in November, jumping 1 percent against October. Eurostat also revised upwards October’s data to a 0.3 percent decline from the previously reported 0.6 percent fall.
The French government said Thursday that it expects to nearly double its official economic growth forecast for 2010, which stood at 0.75 percent in the budget presented in September.
While France and other major European countries have emerged from recession, smaller countries — notably Greece and Ireland — are struggling to tame public debt as tax revenues slump. The European banking system also remains shaky, with institutions such as Germany’s Commerzbank still dependent on government support.
By JACK EWING
Copyright by The New York Times
Published: January 14, 2010
http://www.nytimes.com/2010/01/15/business/global/15euro.html?ref=global-home
FRANKFURT — The European Central Bank left its benchmark interest rate unchanged at a historic low Thursday, amid signs the region’s economy and banking system are still struggling back to health.
The bank’s president, Jean-Claude Trichet, said that while the region's economy is expanding, “We have a bumpy road ahead of us.” It was possible that economic indicators could be uneven from quarter to quarter, he said at a news conference following a meeting of the bank’s governing council.
The bank, which sets monetary policy for the 16 countries that use the euro, left its benchmark interest rate at 1 percent, where it has been since May. Many analysts do not expect the E.C.B. to begin raising rates until late 2010 or even 2011. Mr. Trichet’s comments Thursday are not likely to change that view.
Mr. Trichet, who was asked repeatedly about Greece’s attempts to tame its soaring budget deficit, indicated that the country cannot expect “special treatment” from the E.C.B. But he also dismissed as “absurd” the suggestion that any country would leave the euro zone.
In December, the central bank’s governing council said it would begin scaling back its huge lending program to euro-zone banks, which has helped avert a collapse in lending to business. Mr. Trichet pointed out Thursday that the European recovery is due in part to stimulus measures. “Some of the factors supporting the growth in real G.D.P. are of a temporary nature,” he said.
European growth, while recovering, remains spotty. Output in Germany, the euro-zone’s largest economy, was close to zero in the fourth quarter, the Economics Ministry said Wednesday.
But the European Union’s statistics office on Thursday reported that euro zone industrial production rose twice as much as expected in November, jumping 1 percent against October. Eurostat also revised upwards October’s data to a 0.3 percent decline from the previously reported 0.6 percent fall.
The French government said Thursday that it expects to nearly double its official economic growth forecast for 2010, which stood at 0.75 percent in the budget presented in September.
While France and other major European countries have emerged from recession, smaller countries — notably Greece and Ireland — are struggling to tame public debt as tax revenues slump. The European banking system also remains shaky, with institutions such as Germany’s Commerzbank still dependent on government support.
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